Bankers to Offer Online IDs

FRAMINGHAM (07/27/2000) - To help banks compete against start-ups in the field of online identity authentication, the American Bankers Association (ABA) in Washington earlier this month announced the launch of TrustID, an online identification system.

According to e-strategies director Stephen Schutze, the ABA's TrustID system is an attempt to put banks back in charge of digital signature authentication.

"Banks are trusted parties," Schutze said. "And banks know their customers."

Although the full details of the system haven't yet been determined, the basic idea is that banks will provide both retail and business customers with electronic IDs that can be downloaded to a computer or wireless device.

But Avivah Litan, an analyst at Stamford, Conn.-based Gartner Group Inc., said consumers are a bad bet for digital certificate programs. "For TrustID to be successful, you have to get consumers to understand it and want it - and there's no call for it," she said. "And if they're not going to use it, the merchants aren't going to use it."

Instead, Litan said, merchants turn to third-party vendors like Mountain View, Calif.-based CyberSource Corp., which offers fraud-detection services that don't require customers to first download digital certificates.

B2B Users More Likely

The business-to-business space is a more likely candidate for digital certificates, said Litan, because businesses deal with higher-value trans-actions and have more to fear from fraud.

The processing and verification work for TrustID will be done by Salt Lake City-based Digital Signature Trust Co., which will serve as a central clearinghouse for the system, Schutze said. Details of the TrustID process should be finalized by year's end, he said.

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