Contributing Writer,
Techstrong Group

Security will be a central factor as the European Union moves ahead with plans to have a cross-border digital identity wallet program in place for citizens of its 27 member states starting in 2026. GlobalPlatform, a technical standards organization whose tamper-resistant specifications are used in smartphones, is introducing new security functions for the market bloc’s eID wallet efforts.

The organization, whose membership includes a range of tech vendors and industry groups, this week said that it worked with the mobile ecosystem nonprofit GSM Association to develop the Secure Application for Mobile (SAM) configuration for secure elements (SE), a secure component that the EU is requiring to be used in the mobile device – usually a smartphone – used for the digital ID wallet.

In addition, GlobalPlatform said it is developing a cryptographic service provider (CSP) specification for certifying third-party digital ID applets with a high level of assurance. Such applets will delegate sensitive cryptographic operations to a certified library embedded in the SE, and once certified can be deployed on any certified CSP platform.

The new functions build on what GlobalPlatform already offers in its SE, which the organization said is used for a broad range of form factors on billions of smartphones, including removable SIM cards, embedded SEs and SIM, and integrated SIM. All the SEs are certified according to GlobalPlatform specs and create a foundation for a digital ecosystem spanning Europe, according to the organization.

This will be important as the EU introduces a standard digital wallet to the region, according to GlobalPlatform Executive Director Ana Tavares Lattibeaudiere.

“Top of the agenda for EU Member States implementing eID Wallets is how best to adhere to regulations designed to protect their citizens’ identity, personal data, and digital assets,” Lattibeaudiere said in a statement.

A Regional Approach to eIDs

Tech vendors have for years offered digital wallet applications that let users store, manage and share personal identification information – such as names, date of birth, driver’s license, passports, birth certificates and Social Security cards – online and through their smartphones or other mobile devices. They can be used just as those cards in physical wallets, such a proving a person’s identification or age.

Authenticating a person’s identity is important for a range of tasks, including signing documents, proving citizenship, authorizing payments, claiming benefits and renting a car.

There are already a number of European counties that have their own eID wallets, including Denmark, Poland, Estonia, Sweden and the Netherlands, though not all can be used for cross-border authentication. That’s where the EU Digital Identity Wallet comes in.

The idea is to have a single eID program in place for citizens, residents and business in the entire bloc that could be used from one country to the next. The European Commission (EC) in 2021 proposed the creation of the EU-wide program, with the goal that 80% of EU citizens would have an eID wallet app. They won’t all be the same app, but a system will be in place where each app adheres to EU requirements and aligns with the region’s Digital Single Market strategy.

AI, MFA, Regulations Driving Digital ID

It will add to a fast-growing market for digital IDs. According to the Business Research Company, the market worldwide will grow from more than $26.4 billion in 2023 to $30.17 billion this year, and to $55.67 billion by 2028. Driving the trend include such factors as biometric data privacy regulations, AI-powered ID verification, identity-as-a-service, multifactor authentication (MFA), and cross-industry work on digital ID standards, the analysts wrote.

Juniper Research analysts predict that the number of people using digital ID apps will jump from 2.3 billion last year to 4.1 billion in 2027, an 82% increase over four years.

Digital IDs also promise significant benefits to countries. According to a McKinsey and Company report, countries that launch eID programs can see an economic boost of 3% to 6% in their GDP growth by 2030.

Digital ID wallets are a part of the EU’s eIDAS 2.0 regulation, which was approved in April and gave the go-ahead for introducing cross-border digital identity program starting in two years. Several EU countries already have pilot programs underway and more trials are expected later this year.

Businesses Will Be Winners

Such eID programs will have far-reaching effects on businesses, according to the World Economic Forum. People are becoming more comfortable with using tokens to digitize their documents and other items, and digital wallets already are making business interactions more customer-centric and less website-centric, the organization wrote in a report.

The group pointed to two key trends around digital identity, with one being generative AI. It is accelerating changes in digital interface, with OpenAI’s ChatGPT and similar platforms showing how multiple functions can be consolidated in a single interface, which digital wallets do. Also, because of such payment apps as ApplePay, Google Pay, Venmo and Zelle, people no longer have to carry physical wallets. Some U.S. states are adopting digital driver’s licenses and digital IDs.

Organizations will have to adapt to these trends, according to the World Economic Forum.

“To be successful in the future, businesses will need to earn customers’ trust so they will share discrete real-time data with them via their wallets,” the organization wrote. “This will help to enhance interactions with consumers.”