PayPal Set For Government Universal Credit Contract?

Tom Brewster is TechWeek Europe's Security Correspondent. He has also been named BT Information Security Journalist of the Year in 2012 and 2013.

PayPal, owned by low tax-payer eBay, could be the eighth and final firm in DWP’s identity framework

PayPal has secured a position on the government’s Identity Assurance Programme, which will be managing access for the Universal Credit benefit scheme when it launches next year, TechWeekEurope understands.

Last week seven organisations had been brought on board for the Identity Assurance service, which is designed to let people choose how they access government services. But a Department for Work and Pensions (DWP) spokesperson told TechWeekEurope an eighth and final organisation for the Universal Credit project was set to be announced soon.

That eighth organisation is set to be announced as PayPal, TechWeekEurope understands. It is believed PayPal will line up alongside those providers announced last week, including the Post Office, Cassidian, Digidentity, Experian, Ingeus, Mydex and Verizon. They have all been tasked with delivering a “secure online identity registration service” for the DWP.

If PayPal does become part of the Universal Credit system, it might turn into a PR gaffe for the government. PayPal is owned by eBay, which paid just £1.2 million in tax on £789 million profits (0.15 percent) in 2010 it made in the UK, making it one of the top tech tax avoiders, along with Amazon and Google, which were publicly grilled by MPs last week over their use of (perfectly legal) means to reduce their tax bill.

The DWP said the eighth provider is yet to be announced. PayPal declined to comment.

Universal credit coming soon

This service will let benefit claimants choose who will validate their identity by automatically checking their authenticity with the selected provider before processing online benefit claims. If PayPal is approved as part of the scheme, then users will be able to use their PayPal login to access claims information, TechWeekEurope understands.

“As well as offering a safe and secure system, providers will be required to offer a simplified registration process, minimise the number of usernames and passwords a customer will need to remember and reduce the costs incurred across Government for the management of Identity Assurance,” the DWP said last week.

The government is believed to have been in various discussions with PayPal over the past year. The value of the 18-month framework contracts is £25m.

It had previously been rumoured Facebook was being considered for the Identity Assurance scheme, which will roll out across other government services in the coming years. The government was also believed to have spoken to Google, Microsoft and BT, none of whom have yet scored deals in the national identity scheme.

Deputy director at the Cabinet Office, Chris Ferguson, told this publication last month that the Identity Assurance Programme was open to anyone who could pass government compliance tests, including those without a significant digital presence.

The DWP trial will act as an example on which others can base their own approaches. The project won’t go live until October 2013 at the earliest, however, as that is when Universal Credit goes live, replacing the current paper-based benefits scheme.

Eventually, all government services will run over GOV.UK, which welcomed its first departmental sites last week.

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