Stripe gets into authentication with Stripe Identity

FACTS

Online payment giant Stripe continues to diversify its services. It has just introduced Stripe Identity, a tool for verifying the identity of online shoppers.

• Target: any business, including non-customers of Stripe. The FinTech first addresses its new Identity service to e-retailers in order to help them authenticate their customers when they are paying on their website; but also to many other market players who are not necessarily linked to a payment path.

• Use cases addressed:
  • Identity verification during an online payment process
  • Verification of legal age to access certain services
  • Certain KYC procedures
  • Authentication in case of sensitive transactions, especially on a bank account

• Stripe Identity relies on artificial intelligence and machine learning technologies to operate. Moreover, the FinTech takes care of managing customer data in an encrypted format.

• Technical journey: 
  • On the end-consumer side, it is necessary to send a photo of one's ID when creating an account with e-retailers using Stripe Identity.
  • The consumer will then be asked to send a dynamic selfie every time he wants to validate a payment on the e-merchant's website,
  • the authentication process is then automated, thanks to a real-time reconciliation (15 seconds, according to Stripe) of the dynamic selfie with the ID registered for each customer account.

• Business model: Stripe will charge for the use of Stripe Identity on a per-transaction basis, without giving details on the amounts charged.

• Currently in beta, Stripe Identity is used by about 30 test customers.

CHALLENGES

• Leveraging Stripe's internal expertise: Stripe's competence in identity verification is intimately linked to its expertise in the fields of payment flows and fraud. Leveraging this expertise in as-a-service mode could be compared to the strategy of the US tech players (GAFA), such as Amazon with Amazon cloud, which, capitalizing on their technological bricks, have developed their offer outside their core business. Stripe provides companies with technology developed in-house and used for over 10 years.

• Simplify the fight against fraud: Stripe relies on its strength, expertise and API model to simplify this sensitive step of authentication and storage of biometric data. In addition, e-commerce is booming, but this growth is also synonymous with an increase in fraud risks. Stripe is committed to managing the e-commerce boom to maintain consumer confidence.

• Expanding its reach. For Stripe, this launch means a potential diversification of its customer base, as the PSP now goes far beyond the payment stage. As confirmed by the typology of the first testers of its solution, the latter is used in cases where payment is not present.

MARKET PERSPECTIVE

• The issue of security and authentication at the time of payment is pushing payment giants to embark on the democratization of biometric authentication technologies, like Visa for example. Mastercard also recently announced the acquisition of Ekata, a digital identity player.