SK ID Solutions: Our take on the European Digital Identity Wallet

By Sanita Meijere, Head of Business Relations, SK ID Solutions

By 2025 digital wallets will account for just over half (52.5%) of the value of e-commerce transactions worldwide, with the EU Digital Identity Wallet as a core player in the field. In this newsletter, SK ID Solution’s offers you its on the European Digital Identity Wallet and its effect on our business. Read more here.

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. In Europe,  large platform providers will ultimately be obliged to accept the European Digital Identity Wallet under the Digital Market Act. Hence, SK ID Solutions is investing in R&D to better understand how to address these changes and provide innovative and beneficial services to our current and potential customers across the globe.

Together with sector representatives like CSC, we at SK ID Solutions aim to contribute actively to the discussions concerning the legal and technical framework of digital wallets, as well as running focus groups to learn about market needs and expectations. Here’s our take on the European Digital Identity Wallet:

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 control what personal data they share, it will be easier to check and prove validity of personal attributes (E.g.  driver license, drugs prescription, social benefits family 3+, etc.), documents, and other attributes using smartphone or any other smart device like smart watch, bracelets, etc. that will allow it. 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 allow to confirm their identity, age, education level, open a bank account, access prescriptions for medicines, and additionally it will enable more efficient way of many other everyday things such as applying for university, checking into a hotel, using car-sharing services, etc. Another advantage is that the tool will have cross-border 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 – you will not be required to carry your identity document in physical form anymore and due to eIDAS 2.0 regulations digitally presented identity will have to be accepted.

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 education documents, criminal record, post pay slips in the wallet app, and quickly provide data to public authorities in more convenient way.

Finally, the digital wallet will also have the option to include an electronic signature functionality, which could make it much easier to prove a company’s identity or 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, but it should also ultimately have a positive environmental impact by reducing waste and the amount of business travel.