Future of Cardless Society Lies in Public Funded Decentralized Digital Identity Technology

Banking CIO Outlook | Wednesday, March 13, 2019

Decentralized digital characters funded by people can be used in apps and devices such as telephones, clocks, fitness equipment, and smart rings. Consumers can thus verify all their transactions via their existing phone, which already has biometric verification, instead of being limited to a single plastic card that can be cloned or stolen.

A cashless company brings many benefits to a wide variety of users. Cashless payments mean more streamlined payment processes for payment providers and retailers, which improve the buyer's experience. For governments and regulators, reducing cash payments destroys an opaque method of transaction that helps offenders and illegal activity.

Funded decentralized digital identity technology, people will be able to store their data which is encrypted and accessible only to them. People can also share data with organizations to make payments or access services.  The gamut of card service provider services will thus be eliminated by saving tons of money and improving efficiency in the economy. Use of tokens or certificates that serve as proof of identity enables trusted transactions will power the services, i.e. credit, loans, and other financial services, especially for banks. Plastic card services are no longer required to be linked to a plastic card, which can easily be lost and is nevertheless redundant now that biometrics are standard equipment.

Such a type of cardless society would unleash opportunities for customer choice when it comes to the credit provider they use to purchase an item. For example, one bank might offer a better rate when purchasing a washing machine, while another might be the best option for buying camping equipment.

The new vision of a secure cashless society, an individual’s funded decentralized digital identity will exist only within a decentralized blockchain network, controlled by the individual and stored behind secure encryption. Decentralized blockchain network would be accessible through people's devices and ready to use in all manner of online login, verification and payment scenarios.

A funded digital, decentralized identity is intrinsically linked to payment; it will also provide a better customer experience when the Second Payment Services Directive( PSD2) of the EU enters into force in September 2019. This is because while customers using existing plastic payment cards must confirm their identity every four times they make a contactless payment, this proof of identity is already linked to a decentralized digital identity funded.

In conclusion, a cashless society is one that meets the needs of consumers wanting to make fast, simple and secure payments. Potential to leapfrog from cashless, past cardless, to funded decentralized digital identities is the panacea to unleash the benefits of a cashless society.

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