TL;DR: The new eIDAS2 regulation orders all EU member states to offer identity wallets to their citizens. By 2026, every citizen of the European Union will hold an identity wallet containing digital identity credentials from governments and the private sector. This will make digital life (and its blurring borders) frictionless, trusted and secure.
The various credentials stored in these wallets – think of driving licenses, passports, proof of residence – can be used for purposes such as travel or applying for government benefits. Because the data involved is sensitive, the wallets will have to comply with strict security and privacy principles such as privacy by design, zero-knowledge proofs and selective disclosure. They will also have to be verified by mandatory audits.
Besides digital identity features, the wallets will offer electronic document signing with qualified electronic signatures, which have the same legal weight as a handwritten signature.
Government Services: Most governments already offer eServices for things like filing taxes and getting official documents. These services are however often siloed, causing confusion and headaches. The digital wallet will eliminate these headaches by offering a seamless and citizen-friendly way to interact with government services. Citizens will be able to manage their government issued documents, renew their driving license etc. using their digital wallets both online and offline.
During a police check, citizens can present electronic representations of their identity information, driving license, vehicle registration and insurance coverage. The wallet will only disclose the minimum amount of information needed, after consent and verification of the police officer’s identity.
Education & Employment: Students and job seekers will benefit greatly from digital identity wallets. Students can gather and store educational credentials such as diplomas, certificates and student IDs in their wallets, offering seamless access to university services and student discounts.
Upon entering the job market, individuals can use their digital wallets for the entire employment lifecycle, including applying for jobs and signing employment contracts. They can also selectively disclose identity information as required, for a seamless and secure experience. For instance, a job applicant could share their name and place of residence with a potential employer during an interview, and disclose more information like their social security number later in the process when employment is to be finalized.
Digital Services Across Industries: Digital identity wallets will offer access to a plethora of digital services. Individuals can open accounts, open bank accounts, apply for loans, travel with their digital credentials etc. They won’t have to repeatedly prove their identity. Digital interactions will become frictionless and secure.
As the use cases above illustrate, eIDAS2 will help citizens to:
TL;DR: By 2026, the eIDAS2 regulation will require businesses across all industries in Europe to implement decentralized identity and identity wallets. This mandate will affect a wide range of sectors, including banking, insurance, eCommerce, healthcare, telecommunications, technology, logistics, education, employment, hospitality, and aviation. Beyond achieving regulatory compliance, businesses stand to gain from enhanced user experiences, increased revenue, innovative business models, cost reductions, fraud prevention, and improved data quality.
Banking & Financial Services: Banks and financial institutions will be impacted as eIDAS2 takes effect for electronic transactions, internet banking, and customer identification. However, one key advantage is that they can offer easier and more frictions onboarding for their users. The regulation will also allow them to verify customer’s identity faster, simpler and more securely, commonly referred as KYC (Know Your Customer) and KYB (Know Your Business), in compliance with anti-money laundering (AML) regulations. Moreover, by offering ID wallets to their customers, banks can avoid disintermediation, keep their customers engaged and stay “top-of-mind” for their users. Finally, reusable identity credentials will provide frictionless access to financial products like loans, allowing lending entities to serve customers faster and more efficiently.
Insurance: The regulation will also impact insurance entities, positively in many ways. New customer onboarding will be easier and provide a better user experience. Insurance entities can ensure their offerings stay relevant by providing customers with digital insurance cards via their ID wallets. They will also grant faster access to insurance offerings as customers can share necessary information in a snap, thanks to digital identity verification.
Education & Employment: Schools and employers will leverage eIDAS2 for better authentication and identification. Digital IDs will be issued to students and employees for better onboarding, enabling students to transfer credits or apply to new study programs and employees to start new jobs. Moreover, the digital wallet will enable job applications to provide employers with the information they require faster and easier.
Healthcare: Health entities, including telemedicine providers, will have to comply with eIDAS2 regulations for the protection of patient data with major advantages. Patient and healthcare professional onboarding will be easier and more frictionless. Digital health credentials will be offered via ID wallets, allowing better patient data management and sharing in a secure manner. ePrescriptions can be digitally issued and verified, streamlining the prescription workflow. And in general, health data sharing between patients and healthcare providers will be done in a straightforward manner, reducing bureaucracy and allowing healthcare professionals to concentrate on their main task: caring for patients.
Travel & Hospitality: The travel industry will significantly benefit from the implementation of unified digital identity wallets. Digital identity credentials can be used during the flight booking process, simplifying identity verification and check-in procedures. Storing flight tickets in digital wallets will make them easily accessible and secure. The pre-flight check process will be streamlined, relying on government-attested ID credentials for passenger identity proofing. Additionally, digital travel credentials, which are the digital equivalents of passports, will facilitate international travel by enabling smooth and secure border control processes.
eCommerce: eCommerce platforms will see improvements in user experiences due to eIDAS2. The onboarding and check-out processes will become more seamless, reducing friction for users. Reliable identity and age verification will ensure compliance with regulations and enhance security. Access to products and services will be easier, as users can share pre-verified data quickly and securely. By offering identity wallets, eCommerce businesses can boost customer engagement and loyalty, providing a more personalized and secure shopping experience.
TL;DR: The new eIDAS2 regulation mandates that European governments implement decentralized identity and identity wallets, meaning that governments must offer ID wallets to residents/citizens, issue digital identity credentials to them, allow electronic signatures with the same legal validity as a handwritten signature, and accept electronic credentials presented by individuals for authentication and identification. This is not just about compliance – this will drive better citizen experiences and higher resident satisfaction, greater system interoperability, lower costs, prevention of fraud, and better data quality.
eIDAS2 will spur massive public sector innovation. With frictionless access to eGovernment services, citizens will enjoy better, more convenient experiences when interacting with government. Governments will issue digital versions of official identity documents like passports and driver licenses, securing these vital documents and making them easier to use.
ID wallets will give citizens the ability to control and securely share their data. Data sharing between governments and businesses will become more frictionless, too, improving the efficiency of digital interactions. And with eIDAS2, citizens will even be able to use electronic signatures to sign contracts and forms securely and with legal validity.
Tax Filing: The most obvious advantage of digital identity wallets will be simplifying tax filing. Citizens will have quicker access to their data and can use pre-authenticated data to streamline tax collection and filing. This cuts down on the time spent by taxpayers and tax agencies, and eliminates many potential errors in the tax filing process.
Social Security: Social security documents will be easily accessible via digital ID wallets, allowing citizens to securely store and present proof of their social security status. Government agencies will have a trusted and easily authenticated source of social security data, improving the efficiency and accuracy of social security agencies.
Law Enforcement: For law enforcement agencies, digital ID credentials can be used for secure and authenticated identification of citizens. This will greatly diminish fraud and enhance security. With trusted digital credentials, law enforcement can carry out their roles more efficiently, confidently knowing the identity of the person they are interacting with.
Stay tuned for the final part of our blog series, where we will provide guidance on how to prepare for the implementation of eIDAS2.
