E-residency rocks!
E-residency – up against great expectations
Ever since Estonia announced its e-residency program in October 2014, the potential implications and benefits of such a solution have been debated. It’s been called everything from a PR stunt to a security threat, while the Estonian government has been positioning e-residency as a “government start-up” to imply that every innovation comes with an upside as well as a downside. We spoke to Kaspar Korjus, the e-residency project manager, to get a feel for what we should be expecting from e-residency.
Creating a global digital identity
“Let’s assume that I’m Thant, a 30-year old entrepreneur from Myanmar, Asia. I’m fluent in English, quite tech-savvy, and I’d like to launch a global start-up. However, I don’t have access to a global payment service that would allow me to start receiving payments online. I don’t have access to PayPal or Stripe. Therefore, I have no business. What’s my way out, other than moving away from home?” Kaspar Korjus describes the profile of a person interested in e-residency.
According to Korjus, there have been numerous requests for information from countries that suffer from lack of proper digital identification and therefore have limited access to digital services. These people see e-residency as the first service to allow them to enter into a modern digital society.
“On the other hand, you have all the service providers that consider the overhead of establishing a presence in every country in the world too big. E-residency would open up new markets without the need to sign a deal with all the different banks and merchants there. They would just need to recognize Estonia’s e-residency and sign a deal with an Estonian bank that hosts e-residents,” Korjus explains.
A ‘product’ in the making
However, the government start-up is still in the process of making online banking with e-residency as transparent as it’s being envisioned. “We are taking careful steps and undergoing a proper risk analysis both in the government and the financial sector. Only then can the Estonian government sign off on the project,” says Korjus.
Korjus says there are other tasks to tackle before the online banking business case can become reality. “As with every start-up, one of the most important tasks in front of us is to upgrade our team. We also need to smooth out the application process, which is currently way too burdensome. We need to amend legislation to support the business case of online banking and online entrepreneurship. We need to add services and make the existing ones user-friendlier. We need to find international partners, such as payment providers, to complete the ecosystem. In other words, there’s a lot to be done for e-residency to become a proper ‘product’.”
What do you say to people who criticize e-residency, saying that Estonia doesn’t stand to gain anything out of this? “We are helping the whole world – the payment provider in the US, the entrepreneur in Asia, the banker in Europe. The benefits are long-term. If you believe that a country would gain from having a lot of fans all over the world, then you should believe in e-residency,” says Korjus. So while the country will not be profiting from its e-residents any time soon, and the services available and usable for e-residents are only just starting to open up, the fact of having ambassadors all over the world already makes the venture worthwhile.
One of the many ‘first’ e-residents
While Edward Lucas, senior editor at The Economist was presented the first e-residency card by Estonian president Toomas Hendrik Ilves, Hamid Tahsildoost is the first person to receive e-residency through the regular application procedure. Hamid works for Skype in the US and regularly travels to Estonia to meet with his colleagues here. We asked him about his expectations for e-residency.
How did you hear about e-residency?
I heard about e-Residency from multiple people at Skype and outside of Skype, including our HR Department. With the current and upcoming functionality being built into this, e-residency really has the potential to change the world.
Why did you decide to apply for it? Was it for the sheer innovativeness of it or some real benefits that you saw coming from it?
I applied for it because it’s the type of project that can change the world, and I wanted to be among the first to use it. Seriously, I think anything that can be done digitally should be, but not without adequate security. The security of this card sets the standard for the world. Keep in mind, I’m from the US, where we predominantly still use magnetic strip credit cards.
How (if at all) have you already benefited from being an e-resident?
I’ve been mostly experimenting with document signing. Digital document signing is gaining popularity in the world, but I haven’t seen any place doing it as securely (and openly) as Estonia.
How do you expect to benefit from it in the near future?
I have a few things I still want to do, and I strongly suspect I’ll be able to. In the near future I want to personalize my Ühiskaart [a smartcard used for public transportation in Tallinn – ed.] so I can top-off online, conduct online banking with an Estonian bank account, enjoy some of the mobile ID benefits that Estonian citizens have, and see if I’m able to access other electronic services in Europe using e-residency.
