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"Cross-border is the new normal The pervasiveness of digital technologies is expanding the volume, velocity as well as the scope of cross-border transactions. Once characterized by large ticket-size transactions involving governments and large corporations, access to global markets have now become democratized. The dynamics of digitisation allows individuals and micro-businesses to connect, transact and benefit equally from new and evolving opportunities. Globally, 300M people, for instance, work and stay outside their home country and contribute half a trillion dollars annually to the global economy. Economies are also benefitting from the real opportunity available to hundreds of small businesses, even individuals, to leverage global platforms including eBay, Alibaba’s TMall Global or Airbnb, to retail goods and services anywhere in the world. Roughly, one dollar out of every five spent on purchasing goods in the global economy is directed towards a product that is shipped across borders, up from one in seven in 1995. In aggregate terms, online cross-border commerce accounts for a 25% share of total e-commerce sales. Identity in a borderless digital world Digital identity is the essential founding block of borderless e-commerce. As dealings are conducted remotely, without personal interactions or without any history of personal acquaintance, the ability to verify transacting entities in a simple manner assumes a crucial role in global transactions. International e-tailers have registered strong sales growth, for example, as online shoppers become increasingly confident with entrusting transaction credentials (credit-card details) to online services providers. The payment instrument functions as a source of funds and more significantly are a proxy for verifying the identity of the paying customer. Around the world, governments and industry are developing frameworks and policies to enable digital identity and, by extension, facilitate electronic transactions to take full advantage of innovation, convenience and opportunities offered by going digital. The European Union recently passed the EU 910/2014 on electronic identification and trust services. The regulation provides the legal framework for the cross-border recognition of eIDs, making it easier and safer for individuals, businesses and public administrators in different EU countries to identify and authenticate themselves. A particularly celebrated case is that of Estonia, which has successfully embraced digital ids to drive a broad-ranging set of e-government initiatives. Interestingly, the Estonian system is being extended to foreigners living outside of Estonia in an attempt to create a global, government-standard digital identity. A wide array of service providers — banks, payment networks and social media companies — have also carved a new business by offering to authenticate users for third party online services providers. PayPal Access, for instance, simplifies the checkout experience for its 100M plus account holders by allowing them to sign-in at participating retailers’ sites with just their PayPal user name and password.  The identity gap Unlike advanced economies, many emerging markets are characterized by limited banking services as well as an absence of underlying digital identity infrastructure. This excludes a wide range of economic actors from the global digitised economy. Several emerging economies--India, Bangladesh, Egypt, Ghana, UAE, and Nigeria--are taking advantage of new and existing physical identity infrastructures to create digital identities that underpin the establishment and adoption of successful digital services. The goal is to “make everyone count” by “providing an identity” to access digitally-enabled services. The insufficient cross-border interoperability of national e-IDs however prevents citizens and businesses from benefitting fully. For instance, the national id number may not be portable across borders. Also, according to the World Bank, in many countries in the developing world, Sub-Saharan Africa, for example, 55% of people lack any official identification record, hampering transfers and trade between countries. My Mobile, My identity With 7 billion plus connections, the mobile has reached global ubiquity and can be leveraged as a passport for international transactions. Together, the mobile phone and SIM constitute a versatile authentication and identity platform for digital services. Mobile operators’ greatest asset is the repository of subscriber Identity information and they have made significant investments in building sophisticated and secure identity capture, provisioning, authorization and management systems at scale. They are ideally positioned to leverage their unique strengths to play a significant role as digital identity providers. These include: Global Coverage: The mobile number is the only universally established unique global key that is portable across devices. Customers can make calls to any network and access services offered by their telecommunication service providers from any network. Well-regulated: Telecom is one of the most regulated industries in the world, governed by stringent Know Your Customer regulations. The mobile number issued to the customer is backed by in-person verification processes by accredited agencies and is tied to personally identifiable information from official credentials - passports and social insurance numbers, birth registration, driver’s licenses or voter ID cards. With innovation in device capabilities, MNOs can also leverage advanced biometrics that use fingerprinting, iris or retinal scans or cardiac signatures to reliably confirm their identities in the digital world. Secure and Trusted: For a standardized universal id system to flourish, customers must be willing to adopt it. Widespread use by customers is a function of trust customers has in the ecosystem and its ability to safeguard their private information. Across countries consumers perceive mobile operators as the most trustworthy of enterprises, having established a track record and reputation in services managing customers’ identities. The SIM card, encrypted and part of every mobile device, is arguably the most secure platform to store identity credentials. Additionally, mobile identity can provide high security assurance in combination with other existing online and digital infrastructures and technologies. Custodian of Customer Financial Accounts: Today consumption of financial services is inextricably fused with the mobile device. In many emerging markets with poor banking infrastructure, customers are familiar with using operator wallets to transact, pay for goods, pay bills, and even get access to cash. Currently 276 MNOs offer financial services to 300M customers worldwide. In markets with mature mobile money ecosystems, operators have forayed into offering cross-border payment services. International remittance, in collaboration with managed payment hubs such as TerraPay, is becoming a popular use case. Mobile money service providers in Zimbabwe and Philippines have partnered with international payment networks to allow customers to purchase goods internationally. In advanced markets, the mobile phone is emerging as the default way to store and access a range of payment instruments, with MNOs providing access and authorisation services. The GSMA has launched Mobile Connect to provide customers a simple mobile login and deliver a one-click transactional experience. A single point of contact with mobile operators (functioning as identity federators) allows service providers to offer a convenient, mobile-based authentication solution. Rather than register and remember multiple passwords, the user provides the same authentication credentials (their mobile number) to initiate a transaction. Upon receipt of a context-aware instant message from the service provider, customers complete the process by entering a personal code. The level of assurance can be customized based on service type. For instance, for financial services, a higher level of authentication can be implemented in the form of mobile PKI for example, where the signing keys are stored in the Secure Element (SIM). For users accessing digital services when browsing using their mobile device over the mobile network, the process can be further simplified as the authentication process occurs seamlessly and instantly. A mobile number mapped to a customer’s payment credentials can catalyse a wide range of digital services. Customers can make international payments using the beneficiary’s mobile number rather then enter bank codes. TerraPay - a mobile first international network - for instance uses the customer’s phone number as a primary identifier for a range of international transactions. This allows customers to make instant transfers globally and small traders to expand into new markets and sell their merchandize to consumers in any corner of the world. Similarly governments and international donors can disburse aid benefits directly to mobile accounts of citizens.  Given its universal reach, it is time to standardize around the mobile. MNOs are key players in the digital transactions ecosystem. The mobile, supported by technology advancements, provides a unique opportunity to leapfrog traditional approaches to build a robust and efficient identification system at a scale. Harnessing the power of digital ID systems would require a co-ordinated effort between mobile operators, financial and telecom regulators, and governments, as well as a supportive legal framework to build an ecosystem for safe, secure, transactions, which cuts across sectors and national borders.  "
<https://telecom.economictimes.indiatimes.com/tele-talk/mobile-as-a-proxy-identity-for-international-payments/1589>