This episode of the ID Talk podcast delves into a fascinating new digital ID solution – the GovWallet, which combines biometric digital identity technologies with Visa’s payment technology and infrastructure. To lay it all out, ID Talk hosts Tony Bitzionis and Alex Perala are joined by TECH5 co-founder, Chairman, and CTO Rahul Parthe, with Svyatoslav Senyuta, Government Solutions Regional Leader, CEMEA at Visa.
The GovWallet represents an ambitious effort aimed at a national scale. As Rahul explains, their work on the GovWallet has been about building digital infrastructure, and not simply ID infrastructure. Self-Sovereign Identity is foundational to the GovWallet, but, as Rahul explains, that’s really just a starting point for a wider set of integrated digital capabilities – including, importantly, those that involve payments and other financial transactions, as Visa’s Svyatoslav goes on to detail.
From there, the discussion touches on a range of related questions and topics, including – among other things – financial inclusion, biometric data privacy, and how digital ID technology is already transforming government services, as seen in non-GovWallet examples.
The conversation offers an inside look at one of the earliest and most ambitious ID-focused digital infrastructure efforts in the world, guided by executives with first-hand knowledge and expertise.
You can listen on Apple Podcasts, Soundcloud, Spotify, or through the media player via this link.
The interview transcript
Alex Perala: Hello and welcome to ID Tech. I am Alex Perala, and this is my colleague, Tony Bitzionis. We recorded an interview with two guests, gentlemen from a pretty big companies Svyatoslav Senyuta from Visa and Rahul Parthe, the Chairman and Co-founder of TECH5. We wanted to talk to them because they have a new government wallet solution, GovWallet. It is a digital ID that integrates Visa’s payment technology. It’s a pretty unique approach to digital ID, and it seems like there’s a real opportunity for it to get some traction in a number of countries and regions.
Tony Bitzionis: This interview includes a lot of information. For example, Svyatoslav is Ukrainian, and he provides examples from Ukraine’s own digital ID system, not related to GovWallet, but a separate system as an illustrative example. And then you have Rahul’s technical expertise. And so, I feel like we’ve got it all in one episode.
Alex Perala: It is super interesting. So, definitely worth listening all the way to the end. We are very happy to be joined by two gentlemen who can speak to a really exciting project that is helping to build the emerging digital infrastructure that we see popping up around the world. Welcome to the show, and I would like to ask each of you to briefly introduce yourself, share your role in this project, and then we’ll get into what the project itself is and what GovWallet is. So, Svyatoslav, why don’t we start with you?
Svyatoslav Senyuta: I’m leading government solutions in Central Europe, Middle East, and Africa in Visa. I’m based out of Dubai, and I’m responsible for any commercial engagements with government institutions and organizations. And a core task of my function at Visa is to ensure that we are helping the governments to go through the digital transformation journey and to ensure that we are reaching very high levels of financial and digital inclusion across all the markets.
Alex Perala: Nice to meet you Svyatoslav. I would also like to ask Rahul to introduce himself. A lot of our audience probably already knows who you are, Rahul, but can you introduce yourself for the newcomers?
Rahul Parthe: I’m the Co-founder, CTO and Chairman of TECH5. In our collaboration with Visa, the focus is being on building digital infrastructure. And I want to categorically say that it’s not an ID infrastructure, we are bringing a lot more things together. And as the function of Svyatoslav’s division is to bring government solutions, especially from the payments angle, what I’m doing in this context is working on the digital identity infrastructure part of it. With Visa we are tying the digital identity infrastructure together with the payment infrastructure, which enables the governments to not only implement efficient delivery of government services, but also enable the enterprises in each country to build a digital infrastructure, which is based on self-sovereign identity principles. So, I’m focusing on building that vision and then the whole end-to-end offering for the governments.
Tony Bitzionis: Can you give us an explainer of what the GovWallet is?
Rahul Parthe: Digital identity is the buzzword. And most of the times when we go to talk to governments, they say that they want Digital ID, but if you really dig deeper, they often do not understand it in detail. This is where we go and explain them that digital ID in an isolation is pretty much meaningless. It has to be an infrastructure where the identity helps realize some use cases and helps the citizens to avail those services in a secure and privacy-preserving manner. The GovWallet is a digital agent of an SSI-based wallet. In isolation it is just a wallet, but that’s not what we are offering. What we are offering is the entire infrastructure where we work with the governments to not only help them to provide the citizens with a wallet in hand or in virtual cloud, where they can hold their credentials, which could be identity credentials or payment credentials, but then also help the governments issue standards-compliant credentials from the trusted sources. We also help them to come up with governance policies, and rules of how to take it and implement as a framework. Those policies and frameworks are for financial, legal, commercial and technical aspects.
One of the key use cases is payments. When you are transacting with the digital ecosystem, you are always exchanging something. Most of the times it’s trust, but the biggest value transaction is money. And this is where we are working with Visa, and Visa has its own ecosystem of government solutions, enabling governments to do other programs.
Svyatoslav Senyuta: In principle, Visa as a business is entirely built on trust, and the entire digital ecosystem is built on trust. It is very important when you are working with governments, and there are lots and lots of different sensitivities. And when governments look at the core objectives in terms of digitization, they’re looking first and foremost on how to ensure digital inclusion and financial inclusion, as well as how to provide people with access to services.
Many people today across the globe are excluded to very big extent from being able to access public services, which are critical for their lives. They don’t have access to financial services, so they are excluded, in fact, from the financial system. So, we were looking for how to bring all these elements together for developing and underdeveloped countries. Many of those countries do not have even a national foundational ID. This is a problem, especially in Africa. More than 400 million people do not have foundational IDs. This is critical because if people do not have foundational IDs, they cannot access public services and many other things which are super important. So, in order to address it, we are working with more than 15,000 financial institutions and Fintech companies across the world.
Therefore, we started a strategic collaboration with TECH5 to find the ways to combine two extremely important elements. And, if people look at the formula of financial and digital inclusion, effectively it contains three core pillars. The first one is obviously the ID. And as everything is now moving to digital, digital ID becomes the best form factor. This is where all these processes are moving, and it helps to scale fast as well. The second pillar is digital payments. To make the ID functional, you need to add payment use cases that will be driving the usage. And the third pillar is all about automating processes and regulations.
If you bring these three elements together with the right strategy, it creates a great synergy. We have seen this happening in India with the Aadhaar system, giving significant boost in a very short term to such an immense population. We believe that the combination of those elements is very important, and the ID Wallet is very critical for payments. To ensure that all people have access to financial services, it is important to help the governments to leverage the ID rollout and combine it with provision of local government wallets, which will immediately open access to financial ecosystem.
The government wallets reduce the cost, the risk, and the inefficiency of legacy payment systems. In addition, government wallets give a full transparency and visibility and allow a government to improve the process in order to avoid identity-related fraud. The digital ID component is critical because the government needs to know to whom, for example, the government payment is made, like different types of social aid, social support, pensions, and so on.
For government disbursements, today the trend is just sending funds to bank accounts. People cash it out, and the effect of cashless economy is going down. Cash is still prevailing. But bringing in the wallet component and bringing it into digital domain will help the government understand how efficient their public disbursements are, because it adds a component of programmability. For example, if a government decides to make a payment for health support or education support, they can limit the way people can spend those funds. Additionally, they can give people access and ability to make the payments to the government, improving the way of collecting taxes, fees, fines, penalties, and so on. These instruments bring additional revenues to the governments and helping them to reinvest into their digital infrastructure.
A good example of such synergy and an efficient arrangement of the e-government ecosystem is Ukraine. It was kind of the start of government growth, with the goal of building an inclusive digital government ecosystem, or as they call it, a digital government in the smartphone.
Alex Perala: As both of you were talking, something finally clicked for me. When I first saw the news that TECH5 had partnered with Visa, I thought, that this is interesting, but why payments and ID together? But now it makes sense. And I also remember back to a couple of years ago, I read a book by the economist Stephanie Kelton, who was arguing that the whole basis of government in a way is building a financial relationship with citizens, whether it’s collecting taxes or giving them the means to spend money for healthcare and food. So, I’m not an economist, and I probably completely messed up her argument, but it clicked to me that payments are foundational for how we identify ourselves and relate to the government and relate to non-government entities like banks.
Your employer wants to know who you are, and they want a government official to tell them this. So, that all totally makes sense. And there is a million directions we could go with this, but one thing I want to clarify before we go further is what is the role of biometrics in the GovWallet, and in general what’s the approach to authentication? Because of course, the stakes of this are pretty high. It is serving a very important role, so you have to get authentication and identity. I guess, Rahul, this is probably for you. Please let us know what is the approach that is being taken here?
Rahul Parthe: This is a good question, and this is the basis of the whole discussion. The wallet itself acts as an onboarding endpoint. So, citizens are advised to download this government wallet, and then they can enroll themselves to get their digital verifiable credential from a trusted authority. And, depending on which government it is and what methods of proving the identity is used, the wallet allows citizens to capture their face or / and fingerprints, using the back and front camera of their phone. And then in some countries, there are reference databases to verify it against. Next, the issued credential gets pushed into the wallet. In some countries, the whole IDV process can be in place, where a citizen shows their identity card, takes selfie and a does liveness check, and so on. This is the beginning point for a citizen. They download the wallet, request a credential and receive it. In all of this, as the platform providers, neither TECH5, nor Visa ever holds the credentials. We do not have access to the PII or the information. It is all stored and processed in the central location where the government issues it, and then sends it to the wallet of the user. The role of biometrics is to first verify a person during the onboarding process or when they are getting the credential onto the wallet, and then verify them, for example, when they want to do an eKYC to open a bank account or apply for a credit card. In this case, the financial institution, with consent from the user, might require another biometric check.
With such technology, the eKYC process for the banks becomes like a single click. The GovWallet offers an interactive process where you just go through a few clicks, and by doing that, you can open a bank account literally in a few seconds.
The third role of biometrics comes into play when it is all about security and privacy. To improve security, verification methods can be configured depending on the risk of the transaction. For example, if it is a low-risk transaction, only a face verification is required, and if it is a high-risk transaction, face and fingerprints verification should be asked for. It is important to mention that no dedicated sensor is required to capture face and fingerprints – TECH5’s contactless biometrics acquisition system called T5-AirSnap allows for such capture using a standard front or back camera of a smartphone. In case if the transaction is of a highest risk, the user can configure to request for face, fingerprint and voice or pin code verification. All the matching is done on the device, so it can be controlled by the user.
The wallet comes with a feature that enables single sign-on and replaces the OTPs, which are very exposed to card swaps and other fraud. Now the same wallet could be used for logging into government services or private enterprises with a passkey-like mechanism. So, this is the fourth role of biometrics.
The fifth role would be in privacy. Biometrics and cryptography technologies of the wallet allow for selective disclosure and offline verification. For example, if I need to prove that I’m over 21, I can disclose only this part of data. And, when I show my identity, somebody also needs to make sure that it’s me and not my son bringing in the phone or the physical document. So, they could do a biometric verification on the spot, offline, without consulting any database.
So, the role of biometrics in this process is very large – from verification before the issuance of a credential to authentication and authorization for transactions.
Tony Bitzionis: Digital ID and digital government infrastructure are very important and impactful parts of this industry. We inevitably end up speaking about them for some amount of time each week, but whenever I am talking to a friend or a family member about what I do, this topic comes up and almost always the first question that they have is regarding privacy protection and how it’ll impact them and their privacy. So, my question is how has the GovWallet team approached the issue of privacy protection?
Rahul Parthe: We are pretty much sticking to the SSI principles. So, the credentials are between you and the issuer (the government), and then between you and the relying party. You can choose what you disclose to the relying parties using the selective disclosure. There are trust frameworks that ensure that you are not sharing your data with random people. The communication between you and the service provider is fully encrypted, peer-to-peer (P2P). Nobody in the world knows what is going on between you and the service provider, only the two of you. So, we are sticking to all the security and privacy principles, and the whole stack is built on the SSI principles.
We made sure that our solution is compliant with security standards and is privacy preserving. In fact, we improve security and privacy by providing technologies for offline verification.
Our goal is inclusion. And inclusion means that you need to deal with both, people who have smartphones, and those who don’t have smartphones. So, the solution that we are offering caters for both: people with smartphones or people without smartphones or features phones can equally participate in the digital transformation, using an agent model, where they go to an agent, go through biometric check, and so on. And there are certain measures in the ecosystem and the app that allow the agent not to exploit the person. This is of course not relevant to the western world, but for the parts in the world that we are working together with, it’s a very important option.
Svyatoslav Senyuta: I think that data privacy is obviously a critical element of the security of the ecosystem, and one of the primary objectives and goals for us is to ensure that everything is extremely secure and intuitive for the citizens, and effectively complies with the government regulations, which are different in every country. When we are getting into the process, we do product due diligence for the local requirements, and all the implementation goes within those requirements. It is important to mention that Visa does not store any information, and we want to ensure that, when we are building those ecosystems, the governments also have full confidence that they have and own all the biometric information and have full control over all the mechanisms of data and information flow within the systems.
We are providing governments with technology, vision, expertise and knowledge, which are quite unique as of today in the market because those synergies are just starting to happen. And I believe that we will see more of those different collaborations in the future.
Security is our core principle, and we make sure that there is an absolute compliance with all the requirements of all the markets we are working on.
Alex Perala: If you are enrolled with your phone, what happens if you lose your phone? Rahul mentioned that there are agents someone can go to and confirm their identity without a phone. So, is that the answer? To go to the bank or whatever the government has designated and say that you don’t know where your device is, but you still have your face and fingerprints and ask for access to your identity wallet. Is that how it would work?
Rahul Parthe: The answer is yes and no. If you lose a phone and you buy a new phone, there are mechanisms to recover your wallet and credentials. It is like requesting a backup. Or you can buy a new phone and start from scratch – download the wallet and request your credentials from the government. You have both options. What you are not losing is your identity. Your identity is still with the government that is issuing the credential, and you need to just request a credential. There is also another option where you can go to another agent and recover your wallet.
Another thing that I would like to mention is that many countries are writing data privacy and protection acts and policies. When Visa and TECH5 support these countries by providing their expertise and sharing the information on how to implement such solution and technology offering, it helps counties to speed up the implementation of these policies and make their ecosystems or digital infrastructure in compliance with the policies they write.
Many countries look for best practices from other countries, adopt it, but the technology needs to catch up and ensure that the regulatory policies are perfectly implemented. Our offering helps the governments to comply with what they’ve written in the law.
Alex Perala: There are certain parts of the world that are mobile-first, and some where there is an opportunity, and there is a leapfrog where West is ahead in this new digital paradigm. Visa – TECH5 is a new partnership, as it was only announced in December, and I would like to learn what kind of engagement are you seeing so far from governments with the GovWallet, if any?
Svyatoslav Senyuta: We have lots of interactions today, it is several dozens of those. We see a great interest from the government to start addressing the challenges they have, starting from the markets where they don’t have foundational IDs and where we can bring in health ID and other solutions even in such a challenging environment, as well as bring a payment component to the health ID, which is functional. There are other use cases, like helping to distribute subsidies when, for example, the country is suffering from droughts, and many farmers need support from the government. We have been also reached out by many organizations globally, which are struggling to deliver humanitarian support to people. They are looking for the solution for the last-mile-problem: how to reach out to those people who really need this help, and without the ID component it is almost impossible.
Today it is effectively done through cash, vouchers, et cetera. As you may imagine, there is a huge cost to this and, I assume, quite a significant fraud as well. So, we bring those digital ecosystems in place for the government to streamline all these processes and eliminate fraud.
As an existing example of a similar program, I can again talk about the Ukrainian system. During the COVID-19 Pandemic, people were reluctant to vaccinate, and there was a government program on how to stimulate vaccination. The government was willing to pay 1,000 in a local currency, which was roughly $40 for each twice vaccinated person at that time. The government leveraged their e-government platform, which had digital ID, and they have ensured that in a very short time, like 2-3 month, they have opened more than 13 million government wallets and provided people with incentives. There were 2 objectives: to stimulate vaccination and to ensure the incentive money were only spent from those wallets and spent only on those sectors of the economy that suffered most from COVID – to ensure that the government is incentivizing citizens, but also that the funds are channeled back into the economy into specific sectors. It worked perfectly well as it was an extremely seamless experience. People were very happy because it was easy to receive and spend the money. At some point, people asked for another cluster like pharmacies to be opened for this program so that people can spend the funding at pharmacies as well. And it has been done in a matter of two or three days. This solution provided the government with reliable information and visibility about the development of the program and might help building better public policies in the future.
To ensure that such program is efficient, the government needs to provide two types of access – access to identity, because this is the cornerstone of any access to any government program, and access to payments, because everything is rotating around payments. Whenever you need to use public services, you need to pay. In most cases, whether you need to get any other services, it requires payments as well. And this is where we are bringing this amazing synergy for creating access to help and to uplift everyone everywhere in each corner of the world. And we are happy to do this.
Rahul Parthe: When we started to speak to the governments, they knew that they need digital identity, but it was not clear what it really means and where they have their primary focus. For example, financial inclusions work in isolation, as well as access control, e-government services, digital signatures, and so on. We went to these governments and told them that a citizen should be in the center of everything, and if they need to do, for example, four things, they should be able to do it from one place, and the government should approve their access to their identity, allowing them to access physical or digital spaces, financial transactions and attestations.
With our solution, we provide governments with technology and experience of such implementations, a roadmap, as well as the app that they can test and understand better. They see tangible things, as well as they see what the citizens would be really doing and how they will be receiving services – from receiving incentives to paying fines, all in a secure and private manner. And there will be no intermediary players who would receive and store any information – everything is done only between the user and the service provider.
The beauty of this solution is that everything can be implemented within three to six months, and they can start using it. This is an amazingly fast implementation compared to traditional identity infrastructure projects which might take years of investment and building. The reaction of governments, as you can imagine, is very positive and that they would like to implement it.
It has been an amazing journey. We only started working together with Visa in December, but the moment the teams started approaching governments, we started receiving and great level of appreciation for working as partners with governments, educating them, and demonstrating them that sovereignty of the data is guaranteed as they will not have any dependency on any foreign country for their IT infrastructure. We are ensuring inclusion and enabling their vision of a digital nation, and it is very appreciated. We are very pleasantly surprised with the number of contacts, meetings and interactions we already have with so many governments in the MENA region and around the world.
Svyatoslav Senyuta: I would like to add one comment about the customer centricity. So, if you look at developed countries in terms of digital infrastructure, there are a few countries that have amazing build outs. However, in order interact with the government, you need to download like 10 applications, and it is not as efficient as it could be. So, to make it more efficient, there should be one window, where, if you as a citizen need something, you go to the government and get the help you require through that single app.
I am also sure that in the future the government will be proactively reaching out to you. For example, if you are reaching a pension age, they will open you a pension ID that will be generated automatically and pushed to your government wallet. You can also have it as a verifiable document, but at the same time you will start automatically receiving your pension into your government wallet without a need to go anywhere for it. You will not need to go through eKYC, because your identity is already verified by the government, by the state itself. We will see those trends coming in as well. But the core is to avoid the fragmentation, but go through the consolidation of the digital assets and build customer-centric products for citizens.
Tony Bitzionis: I would like to ask how do these projects come about? It must be so complicated. What is it like working with governments on innovative project like this that there’s no real established playbook for. What is that experience like?
Svyatoslav Senyuta: Indeed, there is no playbook. And I think that we are one of the first few who are elaborating on this. The core factor here is a political will. If you look at the top three objectives of most of the governments, you will notice that digitization is one of them, and I think that this is a great commitment which is driven by the governments themselves. It’s being driven by multiple organizations in this market. And I think that we will see a big I would say revolution in the domain within the next five to seven years.
The level of infrastructure today is very different from country to country. Some countries are super sophisticated, and sometimes it is complicated to get into a discussion and suggest the right architecture to them. But what we see in general across many countries in terms of digital infrastructure, is that here is a large amount of effort we need to put in, and we are ready to do the heavy lifting. We are addressing all countries, no matter how many people are living there. And I believe that the most important thing is trust that we are building by working together with the governments. We have and share a big vision, helping them to meet their objectives in a very short time.
If there is a political will and commitment from the government, it can be happening really fast. And I can say that within the next six to twelve months we can see amazing things happening in the market. This solution changes everything for citizens – they need only their smartphones as everything is digital. This is the world where they can do literally any legally meaningful action like boarding planes or trains, paying for services and goods in a fully digital manner, getting access to physical and digital spaces, and so on. This creates a completely different lifestyle.
What we see is that the adoption of such solutions is really high. Before I was thinking that the adoption will depend on age, but believe it or not, it is not. For example, getting back to the Ukraine’s case, more than 25% of users of their digital government app are 55+ years old. So, I think that this is an intuitive digitization, where people don’t need to learn how to use it, but can just start using it because it is easy and intuitive. In this case everybody will use it daily, weekly, et cetera, because it’s nice and convenient.
Rahul Parthe: There is one statement I would just add is that the stack that we built for the governments has open architecture. The government does not have to solve all the problems at day one. They can first let the citizens get their IDs, then provide the most critical use cases, and then add more. Because it is an open architecture, the government can easily plug in use cases and workflows and add relying parties. This gives the comfort to the governments as they don’t have to wait until a fully ready plan and then go live. They can incrementally improve the system.
The adoption of the system will depend on how many use cases the government brings to the table. If the users will see that with one wallet they can do 10 different things, or a million different things, they will stick to it. It will also help to improve the happiness index of the citizens as well as their trust level to their government.