Visa: Digital ID Could Reshape B2B Payments

The adoption of digital identity in payment networks has the potential to transform financial services, particularly in business-to-business (B2B) transactions.

Visa’s latest research highlights how integrating digital ID with payment systems could enhance security, streamline authentication and accelerate economic inclusion.

According to the 2025 white paper from Visa Government Solutions, 850 million people worldwide lack official identification, preventing them from accessing secure online services.

The report outlines how linking digital identity to everyday payment transactions could create a cycle of mutual adoption, making ID verification a seamless part of digital commerce.

The World Bank's ID4D initiative supports these developments, emphasising their role in improving financial inclusion and access to essential services such as healthcare and banking.

Driving digital ID adoption through payments

Visa’s report suggests that payment transactions are a natural entry point for digital identity adoption, particularly in B2B interactions where secure verification is crucial.

Businesses increasingly rely on digital payment solution and incorporating identity verification into these processes can reduce fraud, enhance compliance and improve efficiency.

Since digital payments already require authentication, integrating digital ID eliminates friction while building trust. For example, biometric authentication, such as fingerprint or facial recognition, can enable secure and seamless verification for B2B payments, ensuring that only authorised individuals initiate transactions.

Research from McKinsey Global Institute highlights the economic potential of digital identity, estimating that its implementation could contribute between 3% and 13% of GDP in some countries by 2030.

Developing economies could see average benefits of 6%, while mature economies may achieve gains of around 3%.

The COVID-19 pandemic has further underscored the importance of digital identity systems.

McKinsey notes that “the potential economic gain from building robust digital financial infrastructure is about 20% greater now than it was before the pandemic,” reinforcing the need for secure and efficient digital authentication.

Biometric verification and security challenges

Several countries have already embraced digital identity solutions, offering insights into implementation strategies and challenges.

Ukraine’s Diia system, launched in 2020, allows citizens to store official documents—such as passports and driving licences—on their smartphones, granting digital versions the same legal status as physical ones.

Belgium’s itsme app, introduced in 2017, demonstrates how public-private partnerships can support secure digital identity systems. The app enables users to verify their identity, sign documents and log into services, with applications spanning government interactions, banking and insurance.

Visa is actively integrating biometric authentication into its payment systems through Payment Passkeys, a technology linking payment credentials to devices. This allows users to authenticate transactions using the same biometric data, such as fingerprints or facial recognition, that they use to unlock their phones.

However, large-scale biometric identity systems present security challenges. The report highlights the complexities of 1-to-N matching, where an individual’s biometric data is compared against a database of many others. Centralised storage of biometric templates introduces privacy risks and at scale, accuracy can become a concern.

For instance, a 1% false positive rate in a database of one million users could result in 10,000 incorrect identifications. As biometric technology scales, ensuring high accuracy and minimising errors remains a priority.

Advancements in AI also introduce security concerns. Fraudsters are leveraging AI tools to bypass liveness detection systems, which are designed to confirm that biometric data originates from a real person at the moment of verification.

The rapid evolution of these threats exposes the need for ongoing investment in security measures.

Industry collaboration and regulatory standards

To address these challenges, Visa is collaborating with industry bodies to establish secure digital identity standards.

The company holds a board position at the FIDO Alliance, which develops passwordless authentication solutions and chairs the Linux Foundation’s OpenWallet Foundation, which focuses on open-source digital wallet development.

Visa is also working closely with the European Union on its eIDAS 2.0 regulation, which requires EU member states to issue digital identity wallets to citizens by the end of 2026. These wallets must meet high security standards to enable access to essential services, including banking and healthcare.

The OpenWallet Foundation is contributing to the EU Digital Identity Wallet by developing secure, interoperable infrastructure. The approach ensures that multiple digital wallet applications can operate within a unified framework while maintaining strict security protocols.

Visa’s report emphasises that successful digital identity adoption depends on industry-wide cooperation.

“Trust is built with high-quality user experiences, strong consent frameworks and an expectation that digital identities and the associated data are protected at the highest security level,” the report states.

By integrating digital ID into payment networks, businesses can enhance security, reduce fraud and streamline B2B transactions, driving broader adoption and innovation in the digital economy.

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