State ID support in Apple Wallet will cost taxpayers money according to records

In September, Neowin reported that users would be able to add their driver’s license and state IDs to their Apple Wallet. It turns out that taxpayers will have to foot the bill for state ID support, according to confidential documents seen by CNBC. The documents show that Apple has a lot more control over the arrangements than the various states which raises questions.

Under the agreements signed with Georgia, Arizona, Kentucky and Oklahoma, Apple gets the power of sole discretion over important aspects of the program such as what devices are compatible with the digital IDs, how states must report on the performance of the initiative and when the program is launched in each area. Additionally, any marketing the states wish to do about the program will have to be reviewed and approved by Apple.

Perhaps the most troubling part of the contract signed by the states, however, is the fact that they will have to pay the costs of the program instead of Apple which ultimately means the taxpayer will be footing the bill. As most people own Android phones and not iPhones, you have to ask whether paying Apple to support ID cards on Apple Wallet is even a good use of taxpayer money.

Speaking to CNBC about the arrangement, Jason Mikula, a fintech consultant, said:

“It’s like a vendor relationship, which makes no sense to me because it’s the states that have the monopoly on what they’re giving to Apple, they could presumably negotiate a much more equal contract. I don’t know of any other example where government-owned systems and identity credentials were made available for commercial purposes in this manner.”

In addition to covering the costs associated with the digital ID scheme, the contract also prevents states from charging people for these digital IDs to help offset the cost. The states are also required to proactively offer the digital IDs to users and promote their usage with stakeholders on the federal and state level such as the Internal Revenue Service.

Right now, it’s unclear how states will offer Android users with a similar digital ID service, if they even bother at all. Under the current arrangement, however, Android users will still be footing the bill for the digital ID service through their taxes even if they don’t get to use the service themselves.