Digital ID: When Business Makes the Optional Unavoidable

A government can introduce digital identity as voluntary. But what happens when businesses begin making it a requirement for everyday transactions?

Imagine opening a bank account, applying for a job, renting a property or accessing a service, only to discover that the preferred way to verify your identity has become the only practical way.

You may still have the legal right to choose. But do you have a meaningful alternative?

As South Africa develops its Digital ID infrastructure and the United Kingdom expands its digital verification services framework, business leaders face a question that extends far beyond efficiency and compliance.

Could thousands of perfectly reasonable business decisions collectively create a society that none of us consciously chose?

Why are businesses adopting digital identity?

For a business owner, the appeal is understandable. Digital identity verification can reduce fraud, simplify customer onboarding, support regulatory compliance and eliminate repetitive administration.

A bank wants to know its customer. An employer needs to verify an applicant. A landlord wants confidence in a prospective tenant. An insurer wants to prevent impersonation. A retailer wants secure transactions.

Each organisation has legitimate reasons to improve verification, and technology can make those processes faster and more reliable.

But there is a distinction between offering a convenient way to prove identity and making that method the only practical route to participation.

When does a business improvement become a restriction on somebody else’s freedom?

South Africa and the UK: Different approaches, a shared question

South Africa’s MyMzansi Digital Transformation Roadmap includes digital identity, data exchange, digital payments and integrated government services. Its roadmap anticipates potential use of digital credentials by banks, mobile networks and financial technology companies, alongside employment-related verification.

In the UK, digital verification is already part of an established commercial ecosystem. The UK Digital Verification Services Trust Framework establishes standards for providers offering digital identity and attribute verification. Such services can support processes including employment eligibility and tenancy-related checks.

The two countries are not implementing identical systems. Nor does the existence of digital verification mean every business must adopt one universal identity method. The UK framework also includes security, privacy and inclusion safeguards.

But both developments raise the same question: what happens when commercial organisations increasingly determine which methods of identification are acceptable for accessing everyday services?

Government policy is only one part of the picture. The marketplace can shape participation just as powerfully.

When voluntary becomes practically unavoidable

Initially, a new digital verification service is introduced as an alternative. Businesses encourage its use because it saves time. Customers adopt it because it is convenient. Organisations invest in systems built around it.

Eventually, older processes may become expensive to maintain. Some businesses discontinue them. Others follow.

No single organisation necessarily intended to remove customer choice. Yet over time, meaningful alternatives may disappear.

This is the difference between legal choice and practical choice.

A technology may remain officially voluntary while becoming increasingly difficult to avoid in everyday life. That outcome is not inevitable, but the possibility deserves scrutiny before dependency develops.

Businesses can become dependent too

Small businesses frequently depend upon larger organisations for banking, payments, insurance, distribution and access to customers.

Imagine a retailer whose payment provider introduces new verification requirements. Or a contractor who must use a particular digital credential to access a major client’s platform. Or an independent business whose bank changes its onboarding procedures.

The smaller organisation may have little influence over the technology being adopted. Its customers may have even less.

Who takes responsibility for the cumulative consequences when everyone is simply complying with the requirements of someone else?

Efficiency is not the same as progress

Business leaders are trained to reduce costs, prevent fraud, automate tasks and improve customer experience. These are legitimate objectives. But efficiency measures how effectively a process operates. It does not necessarily measure what that process does to human freedom.

A system can become more efficient while becoming less accessible. It can reduce administrative costs while excluding people who cannot use a particular technology. It can work exceptionally well for most customers and fail badly for someone whose records are incorrect.

When we measure only what a solution improves, we may fail to notice what it removes.

What happens when the system says no?

Imagine a customer whose identity verification fails. Perhaps there is a database error, their surname has changed, they do not own a compatible smartphone, they cannot access the internet, or they prefer not to share more information than is necessary.

Can they speak to a person? Use an alternative verification method? Correct incorrect information? Continue accessing an essential service while the problem is resolved? Or does the process simply end?

A genuinely human-centred system must account for the people who do not fit its assumptions.

A customer should not become invisible simply because an automated process cannot recognise them.

Are businesses examining the whole system?

One business removes a physical service counter. Another moves support online. Another requires an app. Another adopts automated identity verification. Each decision may be commercially justified.

But collectively, what kind of society are we building? Who measures the loss of alternative ways to participate? Who examines the consequences for older people, small businesses, those with limited connectivity or anyone caught in an administrative error?

We can each make a decision that appears reasonable in isolation while collectively creating a system we would never have consciously chosen.

What should business leaders be asking?

Before adopting digital identity verification, the conversation should include questions beyond cost, security and compliance.

• Will customers retain meaningful alternative ways to verify their identity?
• What happens when verification fails or personal records are incorrect?
• Is the business collecting more information than it genuinely needs?
• Can a customer challenge an automated decision?
• Could the requirement exclude customers or smaller suppliers?
• What happens if the technology provider changes its rules?
• Are human consequences measured alongside operational benefits?

These questions do not oppose innovation. They encourage responsible innovation.

Business has more influence than it realises

Businesses decide which payment methods to accept, which verification processes to use, which suppliers can participate and which alternatives remain available.

They can insist upon accessible systems, preserve alternative verification methods, demand transparency from providers and design processes that accommodate human circumstances.

The responsibility of leadership should extend beyond whether a system works for the organisation. It should include whether its decisions contribute to a society in which people retain meaningful choices.

What kind of society are we collectively creating?

Digital identity could bring substantial benefits to South Africa, the United Kingdom and other countries. It could reduce fraud, simplify access to services and remove unnecessary administrative barriers.

But technological progress should not be judged solely by adoption rates, processing speeds or financial savings. It should also be judged by the freedom, dignity and choices people retain.

Businesses do not have to reject digital identity to protect those principles. They need to recognise that every decision contributes to something larger.

Before adopting the next technology because it makes business easier, perhaps we should ask whether it also makes being human easier.

And one final question for every business leader:

If every business followed your example, what kind of society would we create?