The African digital economy is currently experiencing exponential growth. It is easy to hinge this technological development on a teeming tech-savvy generation going all out to acquire digital skills and embrace emerging opportunities in the space. It is exciting to know that by 2025, the digital economy will be worth $180 billion.
However, as this economy is flourishing, so are its challenges. For example, fraud and allegations of fraud are becoming increasingly rampant in the economy. These odd activities cost the continent in many ways. In 2021, cybercrime reduced GDPs across Africa by 10 per cent, resulting in a $4 billion loss. Still, many African countries lack digital identity bases that could help mitigate the increasing rate of money lost to digital breaches. As digital traffic is building up, there is a need for a reliable digital security infrastructure on the continent.
In Africa, Identitypass, an African compliance and security infrastructure company, is deploying tech to sidestep the lack of infrastructure. The startup processes thousands of ID and data verifications daily for companies with African customers worldwide. In this interview, Lanre Ogungbe, co-founder of Identitypass talked to Ventures Africa about the company’s operations and the need for a digital security infrastructure on the continent.
Kindly introduce yourself and tell us about your background.
My name is Lanre Ogungbe and I am the co-founder and CEO of Identitypass. I started my career as a developer (IT officer) and worked at an NGO called Enactus before I joined myPadi as a Chief Operating Officer. Later, I focused on the business side of tech and became the global head of business services at Accounteer. That was my last role before Identitypass. I am also a member of the national assembly’s Business Environment Roundtable in Nigeria, where I share perspectives with lawmakers on bills around intellectual property and e-Business.
What spurred you to start Identity Pass?
In 2019, we initially built Identitypay – a seamless payment solution platform that enabled consumers to use biometrics (face, fingerprints or voice) and cards to make payments. Around 2020, we already did a pilot used in some stores. The pilot lasted a short while because we did not consider that we needed to verify customers to confirm if they were the original card owners. Some of the available solutions we saw then were not as effective as we desired. So we shifted from launching a payment platform to a verification platform called Identitypass.
What does Identitypass do?
Identitypass offers a quick and accurate solution to verify and gain insights about users’ or businesses’ identities across Africa using data directly from issued identifiers and AI-powered biometrics to prevent fraud in real-time. We are a verification platform that ensures that people are who they say they are.
We work in different forms. Because our customers use our product, they can meet local compliance and KYC checks for their customers. This accelerates their expansion into other African regions because they can onboard verified customers easily. For the end users themselves, they can access many global products and services that are ordinarily not available to people in this part of the world with our service.
We are going a little deeper into the security of products and business tools that cut across transaction monitoring, fraud detection and prevention. We want to curtail identity fraud for businesses.
What are some challenges peculiar to all your customers?
There are so many challenges customers face, and they depend on the industry and size of the business. But notably, their challenge is identity theft and fraudulent activities. We have cases of fake customers using a card that is not theirs to access a product and service. So businesses want to have a proper trail of most individuals using their products and services to be on the safer end.
Also, there is a big regulatory requirement across the board, especially in the crypto, gaming, mobility, and fintech space to meet. Sometimes it is distracting to meet those regulatory requirements and build your products. So it makes sense that we help businesses meet compliance checks while they focus on building their products and services. Today we serve commercial banks, neo banks, and digital banks. They have different challenges, but those two problems are peculiar across the board.
What regulatory challenges do you face with governments in different countries?
Working with the government can be difficult; there is always a lot of scrutiny from regulatory agencies. There’s also unnecessary bureaucracy to getting licensed.
Importantly, election periods in most African countries are unfavourable times. No matter how fast you want a process, it is almost impossible. Different countries have different laws and data policies. Some require that you may need to appoint local representatives in the countries, while some require you to have a physical presence and a physical address.
Sometimes, you are required to fly to a country to submit a single document. This contrasts with other developed markets where you can send a digital copy or use the postal service.
How has the funding you got early this year helped your growth?
The funding went well. I think it came when we just finished YC. We went pretty much fast after the YC and investment. It gave us good publicity and access to the right investors. For us, we were cautious about the right investors to bring onboard. And although we had more people that wanted to come on board, we had to let them know we were comfortable with the tools we had on the table.
How would you describe your impact since inception?
We presently do an average of 1.5 million verification monthly and this means we have helped people access several products and services. One in ten IDs we check is verified to be fake or odd. We have stopped almost 2 million fake IDs or people from accessing our customers’ products and services.
Our services have helped our customers move their businesses to other parts of Africa. We also serve companies outside Africa (India, the UK, the US, and Canada) so their customers in Africa can use their products or apps because they can now verify them. We are in conversations with government organisations to have the right policies for their digital space.
We have over 1.2 billion people who do not have any form of digital ID, and over 81 per cent stays in sub-Saharan Africa. Therefore we need to ensure that more people are recognised and have an identity on the continent. If you do not have people profiled under digital identities, there is no way the government can even know the social programmes to execute. We are also investing in data policies and institutions across Africa.
What makes you distinct from your competitors?
What makes us exceptional is that we are the only ones who provide some technological tools for verification. We have both SAAS and API-based solutions. In the market today, we cover a broad range of verification. We verify government-approved IDs, such as national IDs, driver licences, international passports, bank verification numbers (BVN), phone numbers, vehicle plate numbers, debit cards, security watchlists and tax history. Depending on the number of endpoints a business connects to, the identity and verification platform charges between 10 cents to 20 cents on every verification it executes.
We also understand the dynamics of biometrics verification with data verification. We have a good mix of both. Today, we cut across security data, government data and financial data. Today we can verify government IDs in almost 30 countries in Africa. Many players in the market do not do these. We are focused on building data verification for Africa.
In how many countries are you operational?
Because of the way we work, we do verification in most African countries. We have verified government documents from over 30 countries already in Africa. When it comes to data verification, we have been able to cover five countries. We are widely spread across Africa but do not have physical offices everywhere.
What are the plans for IdentityPass?
We will go deeper into data verification, more data points, security solutions and spin-off new business tools. We have new products coming out soon, and most are in beta mode, but they will be out in a matter of weeks. That is what the next few months will look like for us. We listen to the market and what our customers want.