Chip-based Citizen Identity Card: Opportunities or Challenges?

Digital authentication and electronic identification are becoming increasingly crucial for enterprises. As transactions are digitized, ensuring that the declared user is indeed the rightful owner of the credentials is of paramount importance. In this context, the digitalization of both corporate and individual identities is considered a critical component for enhancing information management and security.

For instance, enterprises in sectors such as banking, finance, and e-commerce require round-the-clock customer verification to mitigate fraud risks and enhance the user experience. Consequently, the chip-based Citizen Identity Card (CCIC) has emerged as a highly effective tool, enabling banks and financial institutions to authenticate user identities conveniently and securely, in line with Vietnam’s national digital economy development objectives.

Chip-based Citizen Identity Card: A New Milestone in Personal Identification

The chip-based citizen identity card (CCIC) with an integrated chip, also referred to as the electronic identity card, represents the next generation of personal identification documents for Vietnamese citizens, replacing the legacy 9-digit ID card and barcode-based CCIC. This new card embeds a microchip that stores personal and biometric data, including facial images, fingerprints, and iris scans allowing for fast and accurate identity verification.

By regulation, all citizens aged 14 and above must be issued a chip-based citizen identity card. The card is valid nationwide, and replacing legacy documents with the chip-based version is mandatory.

The CCIC with chip is regarded as the backbone of the national electronic identification system, directly connected to the national population database to facilitate electronic transactions and online public services.

Chip-based Citizen Identity Card: Opportunity or Challenge?

Opportunities

Enhanced reliability in digital authentication
With integrated encryption and biometric data, verifying user identities via the chip-based CCIC becomes significantly faster and more trustworthy. Compared with legacy ID cards, automated systems can more easily detect forgeries, minimize fraud risks, and strengthen user trust in online services.

Streamlined customer onboarding processes
Chip-scanning technologies can automatically cross-check data with the national database, reducing verification times from several days to just minutes. Customers are no longer required to carry multiple documents and can complete transactions anytime, 24/7. This streamlined process saves time for both clients and enterprises.

Foundation for electronic and digital identity management
The CCIC serves as the “golden key” for eKYC (electronic Know Your Customer) and digital identity solutions. When integrated with an electronic identification platform, users can verify their identity remotely simply by scanning the chip via a device or camera. This provides a critical foundation for businesses to develop online services such as electronic contract signing, online banking transactions, and digital payments.

Challenges

System integration capability
Enterprises, particularly SMEs, may face difficulties if their IT infrastructure is not ready to integrate chip-based citizen identity card readers into operational workflows. While the chip is designed for compatibility with various systems, technical readiness and budget allocation remain major hurdles.

Security and privacy concerns
Although the CCIC’s chip employs high-level encryption, storing extensive personal data raises concerns if systems are compromised. Even encrypted data can be exploited if the card is stolen or databases are breached. Enterprises must implement robust information security measures and comply strictly with personal data protection regulations.

Initial investment costs
Building the authentication infrastructure, including chip readers, management software, and storage systems can require significant capital expenditure. The cost of producing chip cards and establishing supporting databases is substantial, especially for smaller enterprises. While upfront costs may be high, the long-term benefits, reducing errors and fraud, and strengthening customer trust can yield considerable value. Early adopters will gain a competitive edge in the digital economy.

Proposed Solution

Enterprises should adopt comprehensive solutions that fully digitize account opening and customer verification processes. For example, FPT eID, an electronic identification and digital authentication platform developed by FPT, is designed to meet secure and efficient verification needs for both government agencies and businesses.

FPT eID includes key components such as:

• eKYC (automated personal identity verification)

• eKYB (business identity verification)

• FPT.IDCheck (chip-based CCCD verification and anti-counterfeit checks)

• Facial recognition and liveness detection modules

Its cloud-native API architecture allows flexible integration with public service portals, banking systems, e-wallets, and e-commerce platforms, while also supporting on-premise deployment for high-security requirements.

From a security standpoint, FPT eID complies with current Vietnamese regulations (Decree 59/2022, Decree 13/2023, Circular 50/2024) and applies measures such as encryption, data segmentation, and access control to minimize data breach risks. The system is also certified against international standards for biometric anti-spoofing and facial matching, enhancing the reliability of CCIC data verification.

In real-world deployment, FPT eID has been implemented by leading financial institutions, major corporations, and government agencies to help shorten onboarding times, reduce fraud, and improve user experience.

Conclusion

The chip-based citizen identity card offers significant opportunities for enterprises such as enhancing the trustworthiness of digital authentication and simplifying administrative processes. However, to maximize its benefits, organizations must select the right solutions and implementation strategies.

Only by combining the CCIC with a robust and reliable electronic authentication platform (such as FPT eID) and ensuring secure infrastructure can businesses fully leverage its potential - transforming challenges into competitive advantages. Early adopters will be well-positioned to lead in the digital era.

In essence, the CCIC is a key enabler for enterprise digital transformation when implemented effectively, it unlocks new pathways for sustainable growth.