Funny that discussions around identity systems always come back to being analogous to payment systems such as this post wishing OpenID to be the next Visa.  Similar to my thoughts on looking for Identity’s version of PayPal, though I don’t think OpenID as an organization has any hope in Hades of becoming the Visa of Identity.  Someone may use OpenID as a spec to build the Identity of Visa, but that’s even doubtful given its current security model.

The problem holding any such system from emerging is an underlying liability infrastructure so everyone knows who is taking what risks and who gets screwed when the excrement hits the fan at any given stage.  The banks formed Visa and signed onto a rule-set that was then taken and marketed to merchants and customers who signed up for their various parts including risk exposure, penalties, etc..  PayPal came along and while they did offer their own guarantees and manage their own risk, they really rode the pre-existing liability infrastructures of Visa, Mastercard, etc.

So where does a wannabe emergent identity system get an existing liability infrastructure from which to launch to victory?  Who vets and backs online identities tied to actual, legally prosecutable individuals across more than one system that isn’t tied to a payment instrument?  I can’t think of any.  Everyone that wants my business or would have potential cause to persue me for some type of fraud requests a payment device from me.  My credit card number, bank account number, etc.

AaaHa!  So the banks should be the ones that issue my identity… uh wait a minute.  Banks are slow, uninnovative, fraidy-cats, which is why PayPal got to be what it is.

Yeah, so there we are.  Back to square one.  Perhaps Facebook Connect will lead the way, but they will have to a significantly better job of vetting users identity.  I’m not sure about you, but I’ve got several Facebook accounts.  Which one is the actual me?  Or are they all?  Does it matter for an identity system?  Probably given that the main purpose of an identity system is to smooth the path to various forms of e-commerce. 

Dang!  Back to payment again!