Digital Identity and Trusted Transactions: Lessons from Fayda and MOSIP

Identity as infrastructure

Before anyone can open an account, sign a contract or receive a payment online, the other party needs some confidence about who they are. Foundational digital identity systems aim to give every resident a unique, verifiable identity that can be used across public and private services.

Ethiopia's national digital ID programme, Fayda, uses MOSIP, the Modular Open Source Identity Platform. MOSIP is designed so that countries can build and own their identity systems without being locked into a single vendor.

How verification typically works

A common pattern is one-time password verification. A user enters their ID number, the identity system sends a short code to the phone number registered with that ID, and the user enters the code back into the service. If it matches within a time limit, the service has strong evidence that the person controls both the ID and the registered phone.

The Agegnehu Tech platform demonstrates this flow with a 12-digit ID input and a 60-second code window. In the demonstration the code is simulated; a production integration would go through an officially authorised relying-party connection.

Privacy by design

Identity data is sensitive. Good systems share the minimum information needed, ask for explicit consent and avoid storing full ID numbers when a masked reference is enough. On our demo platform, trade records store only a masked identifier such as the last four digits.

Why this matters for trade

When buyers and sellers are verified, fraud becomes harder and escrow, credit and insurance products become easier to offer. Combined with satellite evidence about the asset itself, verified identity creates a powerful two-sided trust signal: we know who is trading and we have independent evidence about what is being traded.