miiCard is an Edinburgh, UK-based digital passport company, which raised £550K in first round funding in September 2011 from a bunch of people, including IQ Capital, angel syndicate Par Equity and the Scottish Investment Bank’s Scottish Seed Fund, who in my opinion clearly have more money than sense.
The concept is that consumers will apply for a miiCard which will cost them £1 per month in order that they can prove their identity when applying for financial products online, thus avoiding the need to send in their driver’s license, passport, utility bills etc. Banks and other institutions will need to sign up to be able to accept the miiCard as proof of identity and will be charged on a per transaction basis. The product has only just launched to the public and the first 10,000 applicants get their account free for life (I doubt you’ll need to rush to get one).
In a quote on their website, CEO James Varga states ‘There is nothing else on the market today which does this, giving miiCard a massive opportunity’ he also states “In a digital economy where there is a 70 percent to 90 percent drop out rate when selling financial products online as soon as the process goes offline, removing the drivers’ licence, passport and utility bill checks is critical. Creating this level of trust online will not only change the face of financial services but anywhere you need to know who you’re dealing with.”
I can’t see this concept working in the UK for a variety of reasons. Firstly consumers are not going to pay for this service, as it’s usage would be so infrequent (you don’t apply for a financial product very regularly do you). Secondly and most importantly, as the first issue won’t kill the business model, they are trying to solve a more or less non-existent problem. The figures they quote of 70-90% drop out rate when selling financial products online as soon as the process goes offline are at best misleading. Circa 70-80% of new applicants pass existing electronic verification/know your customer (KYC) checks and the pass rate for existing customers buying additional products is obviously significantly higher. So roughly only 10 – 15% of online applications would need any further identity verification. You can already carry out additional checks online using services such as URU, which reduce that number even further.
Similar products have launched in the past, primarily aimed at the youth market who have a higher KYC failure rate but they have never gained any traction.
Tellingly, as far as one can tell from the website, no banks or other merchants have signed up to accept the miiCard at the time of writing and I can’t see many doing so.