Early in June this year, The European Commission proposed a framework for a European Digital Identity, which will be available to all EU citizens, residents, and businesses in the EU. Citizens will be able to prove their identity and share electronic documents from their European Digital Identity wallets with the click of a button on their phone. They will be able to access online services with their national digital identification, that will be recognised throughout Europe. Very large platforms will be required to accept the use of European Digital Identity wallets upon request of the user, for example to prove their age. Use of the European Digital Identity wallet will always be at the choice of the user.

The European digital identity will enable us to do in any Member State as we do at home without any extra cost and fewer hurdles. Be that renting a flat or opening a bank account outside of our home country. And do this in a way that is secure and transparent. So that we will decide how much information we wish to share about ourselves, with whom and for what purpose. This is a unique opportunity to take us all further into experiencing what it means to live in Europe, and to be European

Margrethe Vestager, Executive Vice-President for a Europe Fit for the Digital Age

Under the new Regulation, Member States will offer citizens and businesses digital wallets that will be able to link their national digital identities with proof of other personal attributes (e.g. driving licence, diplomas, bank account). These wallets may be provided by public authorities or by private entities, provided they are recognised by a Member State.

EU citizens not only expect a high level of security but also convenience whether they are dealing with national administrations such as to submit a tax return or to enroll at a European university where they need official identification. The European Digital Identity wallets offer a new possibility for them to store and use data for all sorts of services, from checking in at the airport to renting a car. It is about giving a choice to consumers, a European choice. Our European companies, large and small, will also benefit from this digital identity, they will be able to offer a wide range of new services since the proposal offers a solution for secure and trusted identification services

Thierry Breton, Commissioner for Internal Market 

The new European Digital Identity Wallets will enable all Europeans to access services online and will securely store payment details and passwords, allowing Europeans to access these public and private services across the bloc, e.g. renting a flat, accessing a bank account, applying for loans, etc., via a single recognizable identity. Most importantly, it will be a standalone identification method, eliminating the needless sharing of personal data.

The European Digital Identity will be:

  • Available to anyone who wants to use it: Any EU citizen, resident, and business in the Union who would like to make use of the European Digital Identity will be able to do so.
  • Widely useable: The European Digital Identity wallets will be useable widely as a way either to identify users or to prove certain personal attributes, for the purpose of access to public and private digital services across the Union.
  • Users in control of their data: The European Digital Identity wallets will enable people to choose which aspects of their identity, data and certificates they share with third parties, and to keep track of such sharing. User control ensures that only information that needs to be shared will be shared.

To make it a reality as soon as possible, the proposal is accompanied by a Recommendation. The Commission invites Member States to establish a common toolbox by September 2022 and to start the necessary preparatory work immediately. This toolbox should include the technical architecture, standards and guidelines for best practices.

In parallel to the legislative process, the Commission will work with Member States and the private sector on technical aspects of the European Digital Identity. Through the Digital Europe Programme, the Commission will support the implementation of the European Digital Identity framework, and many Member States have foreseen projects for the implementation of the e-government solutions, including the European Digital Identity in their national plans under the Recovery and Resilience Facility.

The Commission’s 2030 Digital Compass set out a number of targets and milestones which the European Digital Identity will help achieve. For example, by 2030, all key public services should be available online, all citizens will have access to electronic medical records; and 80% citizens should use an eID solution.

For this initiative, the Commission builds on the existing cross-border legal framework for trusted digital identities, the European electronic identification and trust services initiative (eIDAS Regulation). Adopted in 2014, it provides the basis for cross-border electronic identification, authentication and website certification within the EU. Already about 60% of Europeans can benefit from the current system.

However, a note of caution sounded by industry players over plans for a pan-EU wallet. These players point to the lack of foundational capabilities, especially in the financial sector that prevents the true unification of such a market. Industry observers argue that this capability, just like any marketplace, will require a significant push to be adopted. That’s why one of the main challenges surrounding the EU eID will be introducing the idea to EU citizens, as projecting a clear-cut value proposition could give it the much-needed boost.

If EU citizens do not sign-up, there will be no point for businesses to use this wallet. Furthermore, people will not be inclined to sign up unless there is clear value for them, in other words, a sufficient number of businesses that have already signed up. Interestingly enough, this dilemma becomes similar to “the chicken or the egg” question, as both business and citizens want to be able to anticipate plausible benefits.”

Marius Galdikas, CEO at ConnectPay

Currently, there are 19 e-ID schemes used by 14 European Union countries, however, according to the European Commission, their “take-up is low” due to limited business applications and cumbersome use.There is also no requirement for Member States to develop a national digital ID and to make it interoperable with the ones of other Member States, which leads to high discrepancies between countries. The Commission hopes that the current proposal will address these shortcomings by improving the effectiveness of the framework and extending its benefits to the private sector and to mobile use.

The existing e-ID schemes are fragmented in terms of their capabilities and geographical coverage. Different countries have different options, which makes delivering a truly EU-wide service an uphill battle as the services are being deployed country-by-country. This means that the largest EU markets are reaping the perks of innovation due to its size and available resources, while the smaller ones get left out for the very same reasons – this a simple business case question when assessing each market

Marius Galdikas, CEO at ConnectPay

The EU eID wallet has immense potential to transform and unify the market, consequently taking on such tech giants like Google and Facebook in terms of reigning in their control of personal data. However, whether it will truly diminish the cross-border red tape remains to be seen.