IDENTITY has become the bugbear for everything big in the online world. With identity fraud increasingly threatening the credibility of banks, multinational companies and governments, a technological solution is being sought – and fast.

Paula Ortiz Lopez, from the Spanish data protection agency, believes one option is the electronic ID card.

‘Everyone has the right to recognition everywhere as a person before the law,’ said Ms Lopez, quoting the universal declaration of human rights.

‘Personal identity is the right of all citizens and governments must establish the suitable mechanisms to facilitate this right to its citizens.’

The concept of identity cards is largely frowned upon by most people in Britain.

But other European nations have long accepted them as part of their culture.

In Spain, the national identity card has been in use since 1944.

Now the Spanish Government is phasing in the electronic ID card, with general use expected by 2008.

‘The difference between a traditional identity card and electronic identity card is that the former is used to accredit one’s identity to third parties, but it is not able to sign for the specific person,’ she said.

‘On the other hand, the electronic version, in addition to identity to third parties, also provides electronic accreditation and can provide remote witness of our presence and may sign on our behalf.’

But with any solution comes concerns about privacy.

Respecting individuals’ rights was one misgiving many have with this type of card, said Ms Lopez.

The personal information uploaded onto a chip can be easily and quickly passed between organisations. So it is important to consider who should have access to this information, what should be included and how it should be processed.

Issues such as its use for commercial purposes, the security measures applied and the feasibility of a centralised storage of health and biometric data, such as fingerprints, should also be considered.

‘The objective is to accredit the identity and the personal data of its holder, as well as the Spanish nationality,’ she said.

‘It is also to certify the identity of the citizen not only in the physical world, but also on online transactions, allowing signing of all types of electronic documents.

‘The electronic signature that takes place will have effects equivalent to those written by hand.’

She added that it was important to ensure the card was interoperable in all European projects and to develop confidence in electronic transactions.