Tuesday, August 22, 2006

Changing address is as simple as shopping online

Things change. Where I choose to live is one of those things that is undergoing a gradual transition. My 'identities' are changing with it.

The view from my window in Boston, which is the banner picture on this blog, is associated with the glow of the floodlights from Fenway Park and the bustle of post-game Red Sox fans and Berkley music school kids.

This view is gradually being replaced through the physical manhandling of boxes of stuff to a new home as I move in with 'the missus' a.k.a 'my girlfriend'. The new view is more relaxing, though the transition comes with a little stress, beyond the pure manual labor.

Its been a few years since I made a move. Fortunately things have got easier as more and more organizations embrace online services. Within about an hour I had made a change to most of the major mailing addresses I have on file with organizations scattered around the US.

For many organizations this type of address change should be relatively simple, since I already have an online account with them, which I use to identify myself. My residential address is just an attribute of my profile, rather than an attribute used to identify me. Financial institutions especially, but almost any organization, just need to email me a confirmation message about the address update to ensure that fraudulent changes to my information can not occur without my knowledge. Hopefully this will be more successful than the experience of Jim Davies from Gartner.

The problems come once I start trying to change my address with organizations that identify me offline or tie services to my home. Offline identity seems to regularly have residential address as an essential component of the identity. Utilities like electricity identify me this way since they only supply their services to that address. I need to recite my address to change my address - it seems like there is too much dependency on this one item of information!

Worse still is the US Postal Service (USPS) - they have little option but to identify me through my mailing address. Cleverly, they enabled my to submit a change of address online even though I have never had contact with them before.

The USPS approach is to validate a customer lives at the address they are attempting to change in a comparable way to PayPal setting up a new customer account. USPS as I say has no idea when I hit their website who on earth I am. So they choose to validate my address through the use of a trusted third party - my credit card company.

When I request an address change, USPS requests I enter my credit card details for a card with a billing address that matches either my old or new address. They make a set charge of $1 to the card, enabling them to pass my name and the address they want to compare to the credit card company for standard payment authorization. If the payment is successful USPS accepts the address change, since the credit card company has authenticated my card, name and address match. For me the customer the $1 payment is well worth the time saved going to the post office to register my change of address. For USPS, they get instant validation that this otherwise unknown customer is authorized to make the address change.

Financial institutions, due to fraud and anti-money laundering customer identification programs have some of the best mechanisms for ensuring most up to date and accurate records of their customers' profiles and personal information. It is natural that secondary organizations, both financial and otherwise would choose to accept customers' relationships with their primary financial institutions as proof of identity.

Online payments have produced a novel way for identity validation to be performed, at little cost to the the secondary organization or customer. And even more importantly, the mechanism uses standard payment methods to complete, not requiring additional integration effort or agreements with the third parties to run the transactions. Maybe unwittingly, credit card companies and banks have made themselves a primary validator of my identity, through both their own needs to ensure they know me and the mandates of the regulators such as FDIC. The major cost of initially identifying me is borne by the bank and credit card company to enable them to maintain a relationship with me. Maybe each of these small transactions made by secondary organizations wishing to identify me helps to offset this cost over time.

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