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Japan Struggles to Retain Buy-in for Digital ID Following Botched Rollout

By Josh Einis
August 17, 2023
in Analysts Coverage, Emerging Payments, Identity Verification
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digital ID Japan cash use

Japan cash use

Japan’s endeavor to establish a seamless and secure digital identification system has encountered stumbling blocks, leading to a loss in public confidence.

According to Biometric Update, Prime Minister Fumio Kishida’s directed the government to review all data associated with My Number digital ID cards by the end of November. This move comes in the wake of mounting public unease due to a string of registration errors and administrative glitches within the system—and it’s putting the future of digital identity initiatives into question. Japan’s government officials have identified more than 1,000 fresh cases where My Number cards were incorrectly linked with the medical data of unrelated individuals, adding to the 7,400 cases that were already known, Kyodo News reports.

A Messy Digital ID Launch

Through the My Number system, Japan assigns a 12-digit number to each citizen and foreign resident. This then links to their personal data, including tax and social security information. However, over the past couple of months, there have been many reported incidents where an individual’s data has been leaked, and—not surprising—this has put a significant dent in public trust. The messy rollout has also impacted Kishida’s cabinet’s approval ratings.

Japan’s current predicament with its My Number digital ID system presents a cautionary tale for the world at large. The inadvertent linking of medical information to unrelated individuals’ identities illustrates just how susceptible digital systems may be and underscores the importance of having a rigorous validation process in place.

The Future of Digital IDs

As with any new emerging tech, there are always stumbling blocks. And while the hurdle behind digital IDs is not over yet—there are still implications and lessons to learn—there’s no doubt that there’s already been some significant progress with digital IDs, and they will play a critical role over the next few years.

Just look at what’s happening in India, as outlined in a recent Javelin Strategy & Research report, “How Alternative Identity Authentication Methods Will Change Payments.” Matthew Gaughan, Analyst of Emerging Payments who authored the research, found that there’s a lot to learn from India’s alternative authentication framework. Having the right framework in place helped position India successfully to roll out its Unified Payments Interface (UPI) roughly seven years ago.

“The lesson is that emerging identity authentication and new payment solutions should develop congruently, so to allow for maximized accessibility for all citizens, not just those with the most resources,” he said.

Meanwhile in the U.S., different regulatory factors are creating obstacles for many organizations looking to roll out their own digital ID system. According to Christopher Miller, Lead Analyst of Emerging Technologies at Javelin Strategy & Research, different states are validating digital IDs in various ways—and he expects the number of pilot programs involved to continue increasing, driving more awareness around digital IDs.

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Tags: Bank of JapanDigital IDIdentityJapan

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