Since the drafting of eIDAS in 2014, there has been a renewed interest from businesses, particularly in Europe, in secure cross-border trade using digital services. Initiatives such as the Mobile Connect-eIDAS pilots, both in 2015 and the upcoming pilot, which demonstrate how mobile networks can be used to identify an EU-citizen of one Member State in order to gain access to a public service of another, have helped the wider industry understand -and prepare for- the impact of digital technology on cross-border commerce.
In July 2017, the financial sector seemed to take a step closer towards improving cross-border payments, after it was reported that the Bank of England successfully tested an “interledger” programme developed by Ripple, the California-based blockchain specialist, to synchronise a payment between two central banks’ systems that simultaneously processes “a successful cross-border payment”. According to Mr Daniel Aranda, Head of Europe at Ripple, the test showed that the interledger, which uses cryptographic algorithms to securely co-ordinate money transfers, could reduce the time it takes to settle a large cross-border payment from between two and four days to “only a few seconds”.
The ease and speed with which cross border transfers was the subject of a recent survey by Saxo payments. The survey, which asked companies the main challenges they faced over cross-border payments, concluded that transaction fees, getting the best financial exchange rate and risk of fraud are the three leading concerns for companies when making and accepting cross-border payments.
Concern over fraud has one of the major obstacles to establishing secure cross-border payments and has been heavily debated in recent years. In an attempt to bring countries into regulatory alignment, eIDAS provides a consistent pan-EU regulatory environment for the electronic identification of individuals and for a set of electronic trust services, namely electronic signatures, seals, time stamps, registered delivery services and certificates for website authentication. Mobile network operators, with their presence in markets across the globe and universal technology, are ideally suited to support financial and commercial services with secure authentication and verification.
The suitability of mobile networks to enable secure cross-border trade extends beyond Europe. In Asia, China has turned its attention to the security of cross-border transactions. China’s recently enacted Cybersecurity Law requires that security assessments are made before personal information and important data are provided to any entity or individual outside of China. Additionally, China has published draft legislation addressing the requirements for local storage and cross-border data transfers and, amongst other things, assessment guidelines for security assessments of cross-border data.
Across the globe, operators can play a role in facilitating cross-border trade operator-developed identity solution, Mobile Connect. Speaking at the industry seminar ‘Deploying Mobile Identity Services Across Asia’ Glen Porter, Managing Director of the digital intelligence firm GBG, explained that Mobile Connect, with its privacy promise, gives people control over which companies they share what data with and could be suitable for various regulatory environments. As pointed out by Porter, Mobile Connect can help combat fraud by using operator attributes -such as usage history and location data- to verify transactions.