The General Services Administration (GSA) has awarded contracts to secure digital credential provider ID.me and communications technology company Verizon [VZN], allow the companies to provide digital identity credentials to individuals accessing government services through federal website.

The credentials allow users that are verified through either of the companies to use the digital credentials to conduct transactions with any agency application that is integrated with Connect.gov, which launches in January, to conduct transactions with these agencies securely and without having to create separate usernames and passwords for each agency.

Under the ID.me contract the government will pay the company for user credentials, Matthew Thompson, co-founder and chief operating officer of ID.me, tells HSR. The company already has relationships in the commercial market with companies like technical garment manufacturer Under Armor, outdoor gear provider REI, Dell and others to allow active military members, veterans, first responders and others to securely purchase items online through the use of digital credentials.

The GSA award is “huge” in terms of expanding revenue opportunities and more importantly it “expands the utility of the credentials for people that we’ve issued credentials to and people that we will issue them to in the future,” Thompson says. “This is a big step where we’re being able to provide assets to commercial and government benefits now, which again from our perspective expands the number of places you can used ID.me digital credentials.”

Currently agencies have to manage “siloed” identity proofing processes and “costly call centers” to help people reset passwords, Thompson says. With the federally-approved commercial credentials, the government will save money, allow for more secure transactions, and make the transactions easier for the users, he says.

Thompson says another advantage of the secure digital credentials is enhanced privacy protection. Currently individuals provide more information than may be needed to be given access to certain federal services. With Connect.gov the amount of an individual’s information that is shared with an agency is “minimized,” the credential provider ID.me is “blinded” to what agency a user is accessing, and the agency is “blind to what credential the individual is using in order to access that site and the user sees a consent screen as to what information that agency is requesting in order to unlock access to the services or benefits that they’re providing,” he says.

The new GSA award is the first time the government has arrangements with commercial providers to interoperable identity services across federal sites that tie into Connect.gov.

Connect.gov was previously called the Federal Cloud Credential Exchange, which is a cloud service launched as part of the National Strategy for Trusted Identities in Cyberspace, or NSTIC, that allows people with federally-approved commercial credentials to access government websites. ID.me began piloting with the NSTIC program in 2013.

Currently the Departments of Agriculture, State, Veterans Affairs, GSA and the National Institute of Standards and Technology are committed to integrate with Connect.gov. Additional agencies are expected to join within the next two years.