How Verifiable Credentials can Create New SaaS and Recurring Revenue Models
The portable and reusable properties of Verifiable Credentials make them a great vehicle for trust providers to unlock new recurring revenue opportunities.
Generating recurring revenue on the same IP has become key to some of the world’s most valuable companies. In a simpler age, we’d buy Microsoft Office on a CD (remember when computers had CD drives?), and that product would last for five plus years.
Then Microsoft saw the light and pushed everyone onto Office 365 and a subscription model, instantly shifting from a transactional revenue model to SaaS and recurring revenue.
The availability of scalable cloud solutions and the rise of connected mobile devices made this same model work even more accessible for software companies. The most valuable companies in the IAM, CRM and Business Productivity segments all have SaaS and recurring revenue models.
For the purpose of this article, I’ll take a fairly recent market as my example of a transactional revenue model that could use digital credentials to flip to recurring revenue models; the one that formed around Government ID digitization.
As more companies moved their onboarding, KYC and EDD processes digitally, there were needs to scan documents and attest to their authenticity.
Typically the Government ID digitization involves the consumer uploading pictures of their documents (e.g., passport, driver’s licence), and then the service will compare it against a selfie/liveness test, to then produce an attestation score for the client. The common pricing model in this market involves selling buckets of transactions for customer touch-points.
For these trust providers, the opportunity exists to not only do transactional for processes such as account opening and KYC refresh, but to get into recurring revenue models through credential issuance.
There’s an opportunity to begin issuing credentials that can be reused within a particular ecosystem, and at various touch-points during the consumer lifecycle. Credentials unlock serious value for subscription.
Because credentials are portable and reusable across digital wallets, the distribution channels are already set up for usage.
Rather than selling Optical Character Recognition (OCR) transactions to a Financial Institution (FI) for single KYC events, sell digital credential solutions. The FI will can then use these credentials to actually get to know-their-customer every time they interact with them. Digital credentials unlock a myriad of use cases for this FI as well. Why wouldn’t the FI be able to leverage these same credentials as in their cross-channel authentication flows (online banking login, call centre authentication, etc.)?
Since the consumer owns their credentials in their wallet, they can also re-use them when they deal with a other business entities — these other entities may want to leverage these credentials to do things like offering better personalized service offerings to this consumer.
And it cascades..
The rise of Digital Wallets and Verifiable Data Standards & Technologies are a foundation that can be leveraged by companies looking to transition into recurring revenue models, without disrupting their existing business models.
Early movers to the space have an opportunity to become trusted issuers of credentials, and see new recurring revenue models become possible because of the significant value added.
At Northern Block, we’re making it simple for companies to begin issuing digital credentials.
If you have an idea or use case in mind, we’d love to talk to you: https://northernblock.io/contact/
Mathieu Glaude, CEO Northern Block
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