18. Digital Identity and Authentication Flashcards
(15 cards)
What is digital identity?
A collection of electronic information (e.g., name, date of birth, ID number) used to uniquely identify a person or entity online.
Why is digital identity important in payments?
It supports secure onboarding, KYC compliance, fraud prevention, and enables remote digital access to financial services.
What is authentication in payments?
The process of verifying that someone is who they claim to be before granting access to a financial service or transaction.
What is single-factor authentication?
An authentication method that relies on only one factor, such as a password or PIN.
What is multi-factor authentication (MFA)?
Authentication using two or more independent elements (e.g., something you know and something you have).
What is biometric authentication?
Authentication based on a person’s physical characteristics, such as fingerprints or facial recognition.
What does SCA stand for?
Strong Customer Authentication — a security requirement under PSD2 that uses at least two authentication elements.
Name the three types of elements under SCA.
Something you know (e.g., password), something you have (e.g., phone), and something you are (e.g., fingerprint).
What is the role of SCA in payment security?
It helps reduce fraud by requiring multiple forms of identity verification for high-risk transactions.
What is one risk of relying on digital identity?
If compromised, it can lead to impersonation or fraud across multiple services.
What is identity theft?
The fraudulent use of someone else’s personal data to gain access to services or commit financial crime.
Why is balancing user experience important in authentication?
Overly complex processes can deter users, while weak controls can increase fraud risk.
What are two common privacy concerns with digital identity?
Misuse of personal data and unauthorised third-party access.
How does digital identity support financial inclusion?
It enables remote onboarding and access to financial services for individuals without physical banking infrastructure.
Give an example of biometric use in payments.
Fingerprint login for mobile banking apps or facial recognition to authorise mobile wallet transactions.
