The European Commission's ambitious digitalisation plans for the European Union (EU) include making a digital identity wallet available to every EU citizen starting from 2024. In short, it will be a tool of infinite opportunities that will facilitate transactions and administrative processes and strengthen business relations between EU Member States. This will be a significant win-win situation not only for citizens but also for entrepreneurs.
The idea behind the European Digital Identity Wallet is simple: it will be a single platform that, using a variety of technological solutions, will allow people to confirm their personal data, status, documents, and other attributes with their smartphone. This will make receiving and providing services much faster, safer and more convenient in just a few clicks.
In practical terms, such a wallet will not only allow people to confirm their identity, age, education level, open a bank account, access prescriptions for medicines, but also to do many everyday things more efficiently, such as applying for university, checking into a hotel, using car-sharing services, etc. Another advantage is that the tool will have international connectivity, i.e. all data in the wallet will be valid and acceptable in all other EU Member States, including the EEA.
Digital Identity Wallet will greatly facilitate the daily routines for businesses, service providers, going far beyond a simple proof of identity. The European Commission estimates that such a single solution could save Europeans up to 855,000 hours of time and for businesses – even more than €11 billion a year. By 2030, at least 80 % of EU citizens are expected to use European Digital Identity Wallet.
The functionality of the digital wallet will be governed by the new, revised eIDAS 2.0 Regulation. Data security parameters and reliability are a high priority in the implementation of this project. In practice it will mean that the user will be able to confirm one item of his/her personal data, such as age, without revealing other attributes such as name, personal identification number, place of residence, etc. Moreover, these attributes will not be limited to legal documents, but the digital wallet will also be able to “store”, for example, concert or flight tickets. It will also work in the other direction – businesses also will have much more control over the data they want to share.
It is obvious, that by making secure and fast digital transactions between EU Member States, the digital wallet would bring significant benefits for businesses, like decreasing the number of fraud cases and improving online payment rates. A common infrastructure for all Member States with easy access for private entities will also greatly facilitate the exchange of information between ecosystems that are currently highly fragmented and isolated. All stakeholders will benefit from the infrastructure with an appropriate regulatory framework.
In addition to the benefits for businesses, it will also improve the day-to-day running of their workplaces: HR departments will be able to quickly verify the identity of job candidates and authenticate all documents, post payslips in the wallet app, and quickly provide data to public authorities on demand.
Finally, the wallet will also support electronic signatures, which will make it much easier to prove a company’s identity and speed up the completion and submission of tax returns. The possibility to sign contracts digitally via Digital Identity Wallet will bring many advantages – businesses will drastically reduce the need to print, sign, scan, and mail paper documents. Not only this will save time and money, it should also ultimately have a positive environmental impact by reducing waste and the amount of business travel.
According to the FIS Global Payments Report, by 2025 digital wallets will account for just over half (52.5%) of the value of e-commerce transactions worldwide, up from 48.6% in 2021. Very large platform providers will be obliged to accept digital identity wallets – under the Digital Market Act, a platform is classified as such if it reaches 45 million monthly active users in the EU.