Mastercard Starts Pilots in Australia to Test Its Vision for a Consumer-Controlled ID Model

Mastercard Inc. on Wednesday announced it has begun its first real-world pilots for a new digital-identity system the company says has the potential to dramatically simplify payments and other interactions between consumers and government and commercial entities.

Two separate pilots for the new service, which relies on mobile devices, are taking place in Australia at Deakin University and with Australia Post. The university, which has five campuses, is testing it with students at the school’s Geelong and Burwood locations in the state of Victoria. The test includes identity verification for registration and digital examinations.

The link to Australia Post involves an integration with the postal system’s existing program, called Digital iD, which is used to verify persons seeking to access postal services.

Information about how long these pilots will last was not immediately available, but Mastercard says they represent the first of an envisioned series of such tests scheduled for “a number of markets throughout 2020.”

A rising wave of fraud and identity theft has led many players in the payment industry to seek out new technologies to allow consumers to easily and quickly verify who they are when interacting with commercial and governmental entities. For example, Mastercard, along with American Express Co., Discover Financial, and Visa Inc., backed the launch in October of a new e-commerce service called Secure Remote Commerce. The SRC technology seeks to simplify e-commerce checkouts with a so-called common buy button that includes remote customer authentication.

The launch of the tests in Australia follows Mastercard’s release in March of a paper calling for a new system of identity verification called, simply, ID. The service’s design includes storage of critical identity data on a mobile phone and features facial recognition for access. “Our increasingly digital life— the way we transact and interact—has challenged our traditional notions of identity, trust, and privacy. We need a new model,” said Ajay Bhalla, president of cyber and intelligence for Mastercard, in a statement Wednesday.

While ID may well represent that “new model,” experts caution that other authentication initiatives are also in progress around the world, raising the question of how and when these new services will interact. “They are not interoperable,” says Julie Conroy, a research director at Aite Group, a Boston-based consultancy, in an email message. “This will be an important consideration for many use cases, such as online commerce.”