What is eKYC and Why Do Some eSIMs Require It?

Key Takeaways:

eKYC is crucial for secure and efficient eSIM activation, ensuring compliance and reducing fraud risks.

Didit's free, unlimited, and forever eKYC solution streamlines eSIM onboarding for telecom companies.

eSIMs offer benefits like instant connectivity, convenience for travelers, and multiple plans on one device.

eKYC enhances operational efficiency, scalability, and user experience for eSIM providers.

eSIMs are revolutionizing the way we connect. In fact, it is estimated that by 2025 there will be more than 2.5 billion devices with eSIM, providing instant connectivity. However, this technological coexistence requires a secure and efficient identity verification process, known as eKYC (electronic Know Your Customer).

Completing this process is a crucial step in some countries before activating an eSIM. Unlike the traditional identity verification system, eKYC is completely digital, allowing for quick and remote verification of the user's identity. This process ensures security and regulatory compliance, in addition to simplifying the activation experience for users of these virtual phone cards.

Therefore, in this article, we will explore in depth what eKYC is, why it is important for the eSIM telephony ecosystem, and how Didit, which offers a free, forever, and unlimited identity verification solution, helps telephony companies take full advantage of the benefits of eSIMs, offering a secure, efficient, and user-centric eKYC process.

What is an eSIM? Definition and benefits

eSIMs, or embedded SIMs, are the digital evolution of the traditional physical SIM card. This revolutionary technology allows people to activate a phone plan without the need to insert a physical card into their devices.

Advantages of eSIMs over traditional SIM cards

These SIMs integrated into terminals offer some key advantages for people.

• Immediate connectivity. Users can activate a data or call plan in just a few minutes after signing up, without having to wait for the arrival of a physical card.
• Convenience for international travelers. With an eSIM, it is possible to access local rates abroad without having to find a physical store to purchase a local SIM.
• Multiple plans on a single device. Users can store multiple eSIM profiles on a single device, allowing them to switch between these plans according to their needs.

Advantages of eSIMs for telecommunications companies

Not only do users benefit from eSIMs, but telecommunications companies also find strategic advantages in these new integrated cards.

• Cost efficiency. By eliminating the need to produce and ship physical cards, eSIMs can lead to savings in logistics costs.
• Increased engagement. The ease of use of eSIMs can lead to greater adoption by many users, for example, among frequent travelers.
• New revenue opportunities. eSIMs open the door to other innovative business models. For example, flexible subscriptions or specific data packages for certain terminals or devices.

What is KYC and eKYC? Definition and meaning

In the telecommunications sector, security and regulatory compliance are crucial aspects. This is where the concepts of KYC (Know Your Customer) and eKYC (electronic Know Your Customer) come into play.

KYC refers to the process of verifying a person's identity before establishing any commercial relationship with them. What is its main purpose? To ensure that the person is really who they say they are and to serve as a preliminary step to typical checks against money laundering or terrorist financing (AML).

Traditionally, this process has always been done manually, requiring the physical presence of the customer in the establishment and the presentation of paper documentation. However, with the advancement of technology and digitalization, eKYC has emerged as a natural evolution of the traditional KYC process. eKYC allows the entire verification process to be carried out remotely and digitally. This enables a more efficient process, saves time and resources, and improves the user experience.

Importance of eKYC for eSIMs

Implementing a robust and reliable eKYC process is especially relevant for telephony companies and eSIM services. With the growing adoption of devices that work with these integrated cards, which allow people to activate phone plans remotely, it is essential to ensure compliance with identity verification requirements, both local and international.

In fact, a well-designed eKYC solution not only helps comply with regulations, but also provides clear benefits to telephone operators.

Reduced fraud risk

By rigorously verifying the identity of users, the risk of fraudulent activities is minimized. According to the Global CFCA Telecom Fraud Report, subscription or identity fraud accounts for between 35% and 40% of all scams that occur in the telecommunications industry. By implementing an eKYC process, this risk is significantly reduced by ensuring that only legitimate and verified individuals can activate and use these virtual cards.

Increased operational efficiency

An automatic identity verification process saves time and resources, enabling much faster and smoother onboarding. This not only reduces costs but also frees up resources that can be focused on other strategic initiatives. In addition, eKYC offers a more sustainable solution that reduces the use of paper and plastic, thus reducing the carbon footprint.

Compliance with different regulatory frameworks

eKYC allows telecommunications operators to comply with different regulations, both national and international, such as the General Data Protection Regulation (GDPR) or anti-money laundering (AML) directives. These regulations require companies to perform customer due diligence, authenticate their documents, and eliminate any suspicion of fraud or money laundering. Complying with these requirements avoids legal sanctions and enhances the company's reputation.

Scalability

A robust eKYC solution allows your company to grow and acquire new customers in an agile way, without the limitations or delays typical of manual processes. This electronic identity verification process opens the door to handling large volumes, which is crucial for scaling and opening up to new markets.

Improved user experience

Users can activate their eSIMs and start enjoying the service in just a few seconds, without the need to go to a physical store or wait for it to arrive by mail. As we mentioned before, this provides a much more satisfactory user experience.

This is Didit's free eKYC process for eSIM

The eKYC process is a fundamental pillar to ensure security and regulatory compliance during the activation of eSIMs. And, thanks to Didit and its free identity verification (KYC) solution, the process becomes a fast, secure, and efficient procedure, adapted to the changing needs of telecommunications companies.

• Identity document verification

We verify documentation from more than 220 countries and territories with advanced technology, which allows us to detect fraud and extract accurate data.

• Facial recognition

Our liveness test uses custom AI to detect deepfakes, verify people's identities during the process, and provide an optimal user experience.

• AML Screening (Optional)

We also offer real-time AML checks against more than 200 global databases, allowing us to detect PEPs (Politically Exposed Persons), sanctions, and other reputational risks.

Benefits of Didit's eKYC process for telephony companies

In this way, Didit's free identity verification process offers several advantages for telephony companies:

• Reduced KYC-related expenses. The costs derived from identity verification are reduced, since our solution has no cost, is unlimited, and forever.
• Speed and efficiency. Didit offers verification times ranging from three seconds to 30 seconds, which favors an almost instantaneous activation of virtual cards.
• Enhanced security. Our document verification and facial recognition technology provides greater anti-fraud protection, further enhanced by optional AML checks.
• Regulatory compliance. Didit complies with the strictest regulations, both local and international, such as GDPR, eIDAS 2, or MiCA, ensuring that verification is secure and compliant with the law.

Do you want to know more about our free identity verification (KYC) solution for your business? Contact our team! Click on the banner below and our team will answer all your questions.