Who Can Be Our “Consumer Identity Provider”?

At the developer’s conference Innovate 2009, where PayPal officially launched their PayPal X platform, PayPal also reviewed more precisely their plans for the future.

Apparently, the success of Facebook Connect is inspirational and with “PayPal ID”, consumers will have the possibility to login generally across many e-commerce sites:

"During his talk, Mark began discussing eBay’s goal to become the “consumer identity provider” of the web. Under the project, which for now seems to be called “PayPal ID,” users can use their PayPal login to identify themselves securely on e-commerce websites and web apps across the spectrum."

Contrary to Facebook Connect which is burdened by fake profiles, PayPal accounts are coupled to bank accounts which avoids this problem. As such, PayPal’s efforts are more suitable for the e-commerce sector.

PayPal is still working on the implementation:

"As to when it will launch: the eBay and PayPal team are currently building the back end of the system as well as speaking with government and regulatory agencies. Sometime next year, PayPal ID should enter testing."

The question is, if PayPal can reach the ambitious goal of being an ID provider for e-commerce customers across the web. In particular the question is whether PayPal should rather be working with existing identification projects such as OpenID, instead of trying to re-invent the wheel. Developer Jesse Stay writes:

“Is it possible for Paypal to go alone in this identity space when they could either be leading or joining existing identity efforts such as OpenID? I may be wrong but I do not recall any mention of the word “open” in his proposal.

And when he mentions things like “they are working with Government” it gets a little scary that a single company may control all this along with government."

These thoughts show that any company that wants to take on an ambitious goal such as becoming the Consumer Identity Provider will need to plan with a lot of resistance.

Which other companies besides PayPal would be able to take on such a task?

Only two: Facebook, the largest social network in the world, who with Facebook Connect have already massively extended their influence. And Google, with its very well developing and similarly functional Friend Connect.

Related posts:

• PayPal X: PayPal Launches Platform For Third Party Apps
• Paypal X: The Universal Shopping Cart Inches Nearer
• The Shopping System of the Future – Starring: Google, Paypal and Amazon

Originally posted in German by Marcel Weiss, adapted for excitingcommerce.com by Jason Soo.