Federated identity management isn’t something people often think about when looking at how merchants can facilitate payment efforts. But the process is essential, as it is about getting subscribers in a network to access the same identification data surrounding a person.
Identity federation entails getting a user’s identity data out over many security domains. Each domain will support a unique identity management system. Two domains can link together or become federated to where the user can authenticate one’s data on one domain and then reach resources on the other domain.
The process simplifies the customer’s payment experience. The user can access one domain without having to log into something a second time.
The process also allows many groups to work under one application. Their resources become easier to access, plus it is more affordable for these groups to run these features.
A General Process
Traditional federation efforts require digital signatures and encryption. It will use a few steps to make everything work well:
- One home node in a federated system will store a user’s identity.
- The user provides one’s credentials to the home node to log into a system. The home node is the only one that the user will directly contact.
- The home node will spread the trusted and encrypted data through different platforms and other nodes in the federated setup.
- The digital signature confirms the person’s identity while ensuring that person doesn’t have to provide further authentication data.
- The user can now use the same login data for multiple applications. The user will be permitted to access whatever features are supported by the federated approach.
Every other node in the federated layout connects to the home node. The home node keeps the data protected and encrypted, reducing the risk of anything being stolen in the effort.
An Improved Process
Federated identity solutions are more effective than single sign-on solutions. While a single sign-on setup allows users to access many databases through one login, it doesn’t work with multiple security domains. The federated solution can link one’s login data through many domains that multiple organizations can access at a time.
Easier to Authenticate Payments
The federated approach also helps businesses authenticate their contents in moments. Federation allows the customer to use one password for one setup when getting online. The customer will not have to use the same password through multiple platforms, nor will that person struggle in trying to find missing password data if anything becomes lost.
The trust-based approach of federation entails a person confirming one’s identity once on the same network. Since there are fewer passwords and login attempts throughout a system, it becomes easier for the user to get online without risking one’s identity or data being stolen. The user’s payments are easy to authenticate, as the person can confirm one’s data in moments without having to repeat things in the process.
Does Multi-Factor Authentication Work?
Federated identity practices can also support multi-factor authentication efforts. The authentication process requests the user to provide more than one form of identification when logging into a network. The practice prevents fraud and outside attacks, plus it provides extra protection for each customer’s setup.
A network can use as many multifactor authentication processes as it wishes. It can provide customers an option to add a second factor to their individual accounts based on what they prefer.
The customer will still have to log into an account only once, even if it means incorporating multiple factors for confirming one’s data. The customer can continue to pay for things online with the same account.
Other Advantages of Federated Identity Solutions
There are many other positives surrounding federated identity efforts to see:
- It is easier for groups working on a project to share and access their payment resources through one platform. Many people can share the same things on a federated setup. The system is ideal for parties that use the same business card linked to one entity.
- Businesses and groups can also consolidate their resources to make their content easier to manage and navigate. The effort helps them save money.
- People don’t have to remember individual credentials for all the platforms or domains they will access. They only require one login setup to get access to everything.
Eliminating Passwords
Reducing the number of passwords someone will manage is essential to the success of the federated identity platform. Estimates suggest that most people use the same password for multiple accounts. People often struggle in trying to create new passwords for each login they want to utilize. Others can break into their accounts and steal their data after correctly predicting their passwords.
Password theft is one of the most common causes of payment fraud. A federated identity setup reduces the risk of password theft, what with there being fewer passwords used in the effort. The risk of chargebacks and other losses caused by fraudulent purchases will be minimal, thanks to the work that comes with the setup.
Are There Concerns?
Entities that want to establish federated identity systems will need to watch how much it can cost to produce a new setup. The extra costs for getting these systems ready may be a burden for some groups.
The members in the same federation will also need to produce security requirement policies that every member can utilize. Each enterprise may have different rules and terms for what works here. These groups should use the same PCI DSS safety standards or other comparable rules for how they will safely handle payments.
Even with these concerns, it will still be simple for businesses to handle payments with ease when using a federated identity system. Merchants can make it easier for people to pay for items with one of these setups, as it is easier to access data as necessary through such a system. Customers will appreciate how efficient the system is, as they can get online and safely pay for the things they want in less time.
