Banking Review

A virtual banking ID

Ambitious start-up miiCard has gone live with its virtual identity card, leveraging
existing online financial accounts to validate the online purchase of further products

BY ELTON CANE

MiiCard, a start-up company that has regularly demonstrated its online identity proposition at financial conferences such as Sibos and Finnovate during the past 15 months, has gone live.

The basic proposition for miiCard is that users can create a virtual identity card purely online within about five-minutes, by filling in various personal details (name, address, phone number, email accounts etc) and linking the card to one or more valid online banking accounts. It’s this element, possible through miiCard’s partnership with account aggregation specialist Yodlee, that it says differentiates it from other online ID services. Social media accounts can also be linked.

The virtual card is a live server-generated image that users can add to places such as email signatures, social media or eBay profiles by inserting a small piece of unique code. When someone presses ‘Click to Verify’ on the virtual ID they are taken to a public identity profile page hosted by miiCard.

The first part of miiCard’s use case is that consumers can use the virtual ID card to create trust in their person-to-person interactions online. This could be useful for auction and classifieds sites, as well as online dating.

But the big opportunity miiCard is trying to address is to enable financial and professional services companies to sell online, and complete the sale purely online without having to go offline to sign documents and present their passport, driver’s licence and utility bills in person.

Citing a 70 to 90 per cent drop off rate in financial customer acquisition once the offline part of the sign-up process is reached at UK financial institutions, miiCard CEO James Varga says consultation with the banking sector has been crucial during the product’s development. But he acknowledges they are not the first to try tackling this problem.

Relationships with layers

“We’re aware of a few other online ID verification services, like GreenID in Australia. But the problem is if I go online and use my passport number to prove myself, you don’t know it’s me using the passport,” says Varga. “The challenge for miiCard to overcome was having to use something not on a database or publicly accessible. It’s that limitation that stops those identities fully complying in many cases with legal requirements.”

Linking a current account is the basic step required to create a miiCard, and the name on the miiCard obviously needs to match the bank account details.
miiCard claims to offer flexibility, so the vendor accepting the miiCard as ID can decide what kind of linked bank account it will accept for verification, even down to that account having  a certain number of transactions each month.

“For a fairly low-risk savings account application, maybe any bank account reference point would be enough,” says Varga. “But for a $20,000 loan, maybe I’d want you to link a current account and a credit card account. For a mortgage, maybe the linked account needs to have regular salary coming in.

“We can add layers of validation and integrity checks on top of just the relationship.”

miiCard re-verifies the validity of linked reference accounts daily, and it says this combined with the deeper checks of account activity will help minimise the use of new fraudulently created accounts. And if an account is shut down by a bank, that account will be removed automatically as a valid reference on the miiCard.

The company has been taking registrations of interest on its website for well over a year, and in October it began inviting customers to register for their miiCard, dangling the carrot that early registrants – the first 10,000 – would receive the product free for life. miiCard claims this would save registrants £12 or US$20 annually, although Varga says actual pricing of the product might change post-launch.

In mid November, it began sending out invitation keys and said it would be giving activation preference to those users who were the top referrers of new registrations via social media sharing.

“We’re not doing a huge amount of marketing,” says Varga. “Part of the exercise is to qualify the market and see what kind of interest there is.

“It’s mostly about getting involvement from these people. Like any online product, success is determined by how user-centric it is. We want people to be able to get in there and use it so we can keep tweaking and developing it for how they want to use it.”

Keeping it online

As well as pushing to get early adopters using miiCard as individuals, the company is also having conversations with financial institutions in the UK, North America, South Africa and Australia about accepting miiCard to complete online product sales completely online.

“Big retail banks with largely offline channels have said, ‘Yeah, as soon as you get traction we’ll use it because we’ll have to’. Just like MasterCard, SecureCode is being used by everyone,” says Varga. “And then there are those operating purely or mainly online who are trying to be competitive with traditional offline banks and this is really where the main activity is. But it’s also in areas such as consumer finance and leasing for cars and appliances. They can sell online now but just can’t complete online, and this is why they’re interested.”

Initially, it expects traction in the UK through its own local efforts and board-level connections, and with North American financial institutions through its Yodlee partnership.

Conversations in other countries are at an early stage, says Varga, but miiCard expects further partnerships may help it with adoption.