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Digital IDs for e-commerce traders to help in fraud fight
A digital seller identity system is a technology-based method of verifying identity of sellers in online deals, ensuring they are who they say they are thus establishing trust between buyers and sellers.
E-commerce traders in Kenya will be required to have a unique digital identification under proposed regulations aimed at enhancing surveillance and policing of transactions in the fast-growing business segment.
The Ministry of Investments, Trade and Industry said a planned unique national e-commerce trustmark, coupled with a digital seller identity system would enhance consumer trust in local trading platforms.
"Institutionalise a national e-commerce trustmark and digital seller identity system to enhance consumer trust in local platforms through verified seller credentials, dispute resolution mechanisms, and accountability measures," the ministry said in a proposed policy.
"This would reduce the cases of clients not receiving exactly what they ordered,” it said.
A digital seller identity system is a technology-based method of verifying identity of sellers in online deals, ensuring they are who they say they are thus establishing trust between buyers and sellers.
This system may use government-issued identity card verification, selfie verification, biometric data such as facial recognition, or checks against databases of known fraudsters or watchlists.
It helps mitigate fraud, streamline selling as well as comply with set regulations.
An e-commerce trustmark, on the other hand, is a symbol, badge, or logo that's displayed on an online store to indicate that the website has been certified to have complied with established regulations by the mandated policing body.
It serves as a visual cue to consumers, assuring them that the online shop has met certain standards of security, privacy, and reliability.
In the draft policy document, the state is also seeking to create a national e-commerce innovation and investment fund, which it says will be tailored to provide targeted financial support to startups and small enterprises in the logistics-tech, online marketplaces, and digital payments platforms in a bid to accelerate innovation and scale-up.
The Trade ministry says the policy has been developed to address emerging challenges in the rapidly growing sector, including lack of compliance standards and uncoordinated enforcement by implementing agencies, violation of consumer rights as well as unfair competition that leads to price fixing.
The US International Trade Administration, an agency of the US government Department of Commerce, projected that revenue in the e-commerce market in Kenya could reach $900 million (Sh116.35 billion) in 2024, with the number of users expected to hit 12.26 million.
The agency says the highest level of consumer interest on e-commerce platforms was in clothing, shoes, food, and beverages.
The most frequent channels used by consumers for product information included search engines (63 percent), customer reviews (58 percent), and social media (51 percent).
The level of consumer interest on e-commerce platforms was highest in clothing, shoes, and food and beverages, respectively.
