New York City is considering adding banking chips to its municipal IDs. With the chip, city ID holders could put money on their ID cards and use their IDs for payment. The mayor’s office put out a request for information last week calling on developers to submit “innovative open-architecture” solutions for payments.
New York’s city ID program is the country’s largest and most successful municipal ID program, with nearly 1.2 million cardholders. Municipal ID has made it possible for many individuals in the city to have documentation that can be used for city services as well as discounts on things like gym memberships or museum admissions. The mayor’s office says that it would like to expand the use cases for city ID to include helping unbanked and underbanked populations in New York City. The program currently partners with 13 local financial institutions that accept the card as primary ID to open a bank account, adding payments technology to the ID itself could make it easier for residents that may not interact with the banking system.
Millions of people in the US do not have a bank account and the reasons for this vary widely. In some cases, lack of identification is keeping people out, but so is poor credit, prior overdrafts, high checking account fees, as well as widespread distrust of the financial system. As more transactions go cashless, there is the potential for a number of people to be blocked from municipal and private services if they do not at least have a debit card. Prepaid debit cards have taken off in recent years as a stop-gap, but these cards often come with high fees to put money on the cards, check balances or get cash at an ATM. A municipal option without those fees could offer another, more equitable solution.
Oakland, California was the first to include payments as part of its municipal ID program in 2013.
New York City is open to proposals for banking chips on city IDs until June 28, 2018. Applicants chosen to move forward in the process will be notified by December 2018.