Portable Digital Identity as an Enabler of International Remittances

Identification is one of the core building blocks for end-to-end digitization of remittances, given that all financial service providers must know their customers. Women and men on the move encounter significant identity verification challenges tied to their departure circumstances and the range of identification credentials at their disposal. The availability, quality, and type of identification documents vary substantially, complicating the identification process. Furthermore, migrants’ identification needs evolve along their journey—from border crossings to accessing employment, financial services, and government benefits. Understanding these complex identity dynamics and evolving identity needs is essential for creating identity solutions that foster migrant economic integration into host communities, deepening the financial sector in countries of destination and origin.

Although, over the last 20 years, the concept of digital identity has grown as the digital world has expanded. Yet, in many jurisdictions and corridors, a significant number of people do not have essential identity documents, making it difficult for them to prove their identity and preventing them from accessing financial services, including remittances and government services.

Unless challenges on acceptable identity and risk-based KYC are widely recognized by the regulators and policymakers, targeted interventions—to improve the flow of remittances through formal channels and reduce the transaction cost of remittances—may not yield the intended results. To allow for greater access to affordable remittances for migrants in an inclusive financial ecosystem, creating a better solution for trustworthy identification is of paramount importance.