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European Digital Identity Wallet: One ID for EU citizens

The European Digital Identity Wallet is a personal digital wallet with which you will be able to identify yourself digitally in the future. Is this the solution for a centralised ID?

Oliver Schonschek
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Published: 12 Apr 2024

Market researcher Gartner is certain that technologies such as identity wallets will continue to grow in popularity and enable people and systems to selectively exchange information or prove their authorisation while at the same time maintaining privacy.

But there is a challenge: so far, there is no single identity wallet, but many different ones on the market. The goal, however, would be to have a centralised, compatible identity wallet, provided the provider is trustworthy and security and data protection are guaranteed.

The European Digital Identity (EUDI) wallet is now an approach to achieving this goal.

The EU ID wallet

At the end of 2023, the EU bodies reached an agreement on the European Digital Identity Wallet. "The EUDI wallet will put citizens in control of their data and make online services more secure," said Thierry Breton, EU commissioner for the internal market, at the time. "It will strengthen Europe's technological sovereignty and help us to meet current and future challenges in the field of digitalisation."

EUID wallets are personal digital wallets in the form of apps that citizens can use to identify themselves digitally and store and manage their identity data and official documents in digital form. These can be, for example, driving licences, medical prescriptions or educational qualifications.

The idea itself is not new - many citizens already use digital wallets or "e-wallets" in their mobile phones to store boarding passes when travelling or to keep virtual bank cards ready for payments. Such wallets, which are often offered by large online platforms, enable their users to log in to various other services online, for example to make online purchases.

But there is a problem - with such "logins", users do not necessarily have full control over which identification data is passed on to online services. In addition, there are currently no harmonised eID wallets provided by the member states. Under the new rules, EUDI wallets issued by member states will be available to all. The central promise is that citizens will be able to prove their identity throughout the EU if this is necessary to use online services or pass on digital documents.

The acceptance of a wallet is and remains crucial

The new EUDI wallet is not mandatory for users - citizens are free to decide whether they want to have such a wallet at all, according to the European Commission. Users will also be able to decide for themselves which personal data they wish to pass on to online services.

However, public services and certain private services - very large platforms and providers that are legally obliged to provide strong user authentication - will have to accept EUDI wallets. This applies, for example, to the processing of payments and the opening of bank accounts as well as to certain use cases in the areas of transport, energy, social security, health, water supply, postal services, digital infrastructure, education or telecommunications.

The obligation to recognise the wallet for authentication applies to very large online platforms that have been designated as such under the Digital Services Act, including those operated by Meta, Amazon, Apple, Booking.com, Tik Tok or Zalando.

The European Commission also emphasises the advantages for platform providers: Because of their security features and the legal certainty created, it will also be attractive for all private service providers to recognise the identity wallets in their services. This would also open up new business opportunities throughout the internal market.

The EU sees many use cases and benefits for its wallet

The European Commission cites numerous examples of applications, such as accessing a bank account, initiating a payment or applying for a loan, submitting tax returns or enrolling at a university. The Commission sees a possible scenario in renting a car at the airport, requiring a copy of the passport or ID card, driving licence and credit card, the signature of the contract documents - with the EUDI wallet, all this could be done in advance.

According to the Commission, the existing digital state identification systems have several significant shortcomings, as they are not available to the entire population, are often limited to public online services and do not allow seamless cross-border use.

The EUDI wallet should build on existing national systems. Existing national solutions that enable seamless identification and authentication in the public and private sectors across the EU and the transfer of personal electronic attributes and proofs are not to be replaced, but supplemented.

An EUDI Wallet Consortium (EWC) is gathering supporters and wants to pilot use cases.

Digital economy sees great opportunities

From a business perspective, the EUDI wallet could become a central factor for a standardised ID, fulfilling a long-held wish. Bitkom president Dr Ralf Wintergerst explains: "Secure digital identities can be the game changer for digitalisation in Germany. The eIDAS regulation and the associated introduction of an EU wallet will lay the foundation for genuine digital communication between citizens, the administration and the economy."

In a survey commissioned by Bitkom last year, 58% of German citizens stated that they would like to store their ID card or driving licence, as well as other documents such as their health card or certificates, on their smartphone.

Wintergerst concludes: "We need highly secure and easy-to-use digital identities in Germany. The eIDAS regulation can bring us much closer to this goal."

However, it is and remains crucial that the central importance is safeguarded by appropriate security and the necessary data protection. It is well known that such databases are always a high risk and a favourite target for cyber criminals, who see an ID wallet as a master key to confidential data.

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