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Did You Know? New Data Shows That Sharing Economy Platforms Are Making Critical Authentication Mistakes

August 21, 2019
sharing economy identity authentication, passive authentication, digital trust

With nearly 111 million consumers using services like Airbnb, Uber and Freelancer.com daily, the sharing economy is booming more than ever before. And if you consider the sensitivity of the information, goods, services, and funds being exchanged, it should go without saying that the secure identity authentication and verification of users accessing these platforms is critical. But as a new report from PYMNTS shows, many sharing economy platforms are still using surprisingly weak identity verification and authentication methods that put consumers’ digital identities and data at risk.

Identity Authentication Challenges for Sharing Economy Platforms

Based on their survey of 3,585 consumers in early 2019, PYMNTS made the following conclusions about the digital identity authentication and verification techniques being used by sharing economy platforms today:

  • Many sharing economy platforms seem to be sacrificing onboarding and login security for more seamless user experiences, putting users and their data at risk.
  • Many platforms also seem to be using outdated and vulnerable forms of identity authentication and verification (such as passwords) despite the fact that users prefer newer methods:
    • PYMNTS found that fingerprint scanning was the most popular method of authentication amongst users logging into sharing economy platforms. 76.4 percent of consumers who are asked to verify their identities by scanning their fingerprints when logging into existing sharing economy accounts report being “very” or “extremely” satisfied with their login process.
    • Only 9.2 percent of surveyed consumers say their sharing economy platforms authenticate them using fingerprint scanning.
  • The most common way sharing economy users say they are asked to authenticate their identities when logging into their accounts is through simple passwords (49.5 percent) and email addresses (35 percent).
  • This is problematic because not only are customer satisfaction rates lower when using password and email address authentication, but these methods also have known vulnerabilities considering that consumers’ personally identifiable information is easily accessible to fraudsters on social media and the dark web.

Based on PYMNTS’ data, it can be concluded that sharing economy platforms could solve these issues by employing the identity verification methods most preferred by their users (fingerprint scanning and personal questions) – but that would only be addressing one side of the experience vs. security coin. As numerous news articles show, fingerprint biometrics can be shockingly easy to hack and personal security questions have the same issues as passwords and email addresses – they’re notoriously simple to crack using information found or purchased on the dark web.

So what can sharing economy platforms do to both raise their users’ satisfaction levels and ensure that their data and identities are protected against fraud?

Identity Authentication Opportunities for Sharing Economy Platforms

Passive identity authentication, an emerging technology that is already in use at many of the world’s largest banks, healthcare companies, and technology enterprises, would allow sharing economy platforms to authenticate users frictionlessly through their mobile phones without any action necessary on the part of the user. When compared to fingerprint scanning or personal questions, passive authentication is even more seamless, and is substantially more secure as the only way a fraudster could crack this technology is if they were actually in possession of the target’s mobile device (which is not scalable).

Passive identity authentication, such as Payfone’s mobile authentication tools, would enable sharing economies to leverage the same level of security used by large banks while also extending the best possible experience to their userbase.

For more information on Payfone’s suite of passive authentication solutions, contact us here.