The Path to a Unified Digital Identity in the EU and Germany
By Uwe Stelzig, Managing Director DACH at IDnow
The European Digital Identity Wallet (EUDI Wallet) aims to enable simple, fast, and secure digital identification. It will be introduced by the European Union (EU) member states as a uniform identity solution. However, those responsible in all countries still have several tasks ahead of them. By 2027 at the latest, the prerequisites for the EUDI Wallet must be created. At that time, it must also be accepted for various public and private services.
According to PwC, 69 percent of German financial institutions already use some form of AI application – and 75 percent want to expand their use of AI within the next years. Their main goals are increasing efficiency (68 percent) and cutting costs (52 percent).
A major breakthrough for the digital wallet is imminent in Europe and Germany. With the adoption of the new, revised version of the Electronic Identification, Authentication, and Trust Services (eIDAS) regulation in February 2024, the EU has created the foundation for the EUDI Wallet. The Federal Government in Germany is currently working step by step on its own national implementation of the technology.
German Citizens will be able to use the state EUDI Wallet to identify themselves digitally across the EU using their smartphone, simply, quickly, and securely. To do this, the online ID card with its identification function – a primary core function of the EUDI Wallet – will be transferred to the smartphone. Additionally, the EUDI Wallet will in the future serve to digitally store, present, and sign official documents with a qualified electronic signature (QES). Overall, the new technology significantly simplifies identity verification in numerous matters – whether in contact with authorities and banks, when concluding a contract, or while travelling. With regard to protecting personal data and user privacy, the European Commission and Germany promise to maintain high standards. The use of the EUDI Wallet remains voluntary and free of charge for citizens.
In addition to the state solution, private providers in Germany will also have the opportunity to develop and have their own EUDI Wallets certified. This hybrid model is intended to give citizens real freedom of choice and promote innovation. As part of the roll-out of the EUDI Wallet in Germany, the Federal Government is involving the public through a close dialogue and enabling active participation.
A current forecast by Gartner underscores the significance of this development: According to the market research company, by 2026, at least 500 million smartphone users worldwide will be using digital wallets. As a result of the eIDAS 2.0 regulation and the simplified procedure for issuing QES, the market for digital signatures is also experiencing an upswing, according to Fortune Business Insights. The market research company predicts it will grow from 2.43 billion US dollars in 2024 to 42.08 billion US dollars by 2032.
The Online ID Card Remains Unpopular
The online ID function for using the electronic identity (eID) can be considered a precursor to the EUDI Wallet. The technology has been available since 2010, but it is still used little. As the eGovernment MONITOR 2024 shows, the proportion of Germans with an German identity card who actually use their online ID card has increased from 14 per cent to 22 per cent between 2023 and 2024. This market penetration is not a positive sign for the acceptance of the EUDI Wallet. It is up to the Federal Government to market the EUDI Wallet correctly, which is a more comprehensive platform with more functions. Parallel to this, the online ID card will remain a standalone national identity solution.
Tangle of Legal Acts
Each EU member state is obligated by the eIDAS 2.0 regulation to provide or certify one or more EUDI Wallets by 2027 at the latest. In Germany, a first version of the state EUDI Wallet with basic functions is to be available by the end of 2025 and will be continuously expanded with new functions until 2027. Before it can be launched, however, the legal framework and technical requirements must be in place.
The European Commission defines a uniform general framework, technical standards, and specifications for the EUDI Wallet through delegated and implementing acts. Currently, not all legal acts are available; they are being developed and passed step by step. Germany must transpose them to its national legislation. This includes both reviewing and potentially amending existing laws and introducing new legislation. In addition, it must establish the necessary technical infrastructure to provide and manage the state EUDI Wallet. The Federal Government in Germany must also inform all citizens about
the EUDI Wallet and train employees in authorities on how to work with it.
To ensure timely implementation of the eIDAS 2.0 Regulation, it is crucial in Germany and other EU member states to take the required steps in a timely manner. Time is pressing – especially because not all legal acts have been issued yet.
A New Wallet for the Modern Future
The EUDI Wallet is an important step towards simplifying digital identification and strengthens trust in digital transactions. Citizens benefit from a secure and user-friendly identity solution with which they can log in to various public and private services in the EU. Instead of separate accounts or multiple proofs of identity, citizens will only need the EUDI Wallet.
From 2027, authorities, healthcare service providers, online platforms, and other companies must accept the EUDI Wallet. It is also to be used by banks, financial service providers, and telecommunications providers for their customer identification (Know Your Customer, KYC) and anti-money laundering (AML) procedures. All those affected face the challenge of making the necessary adjustments to their technical infrastructure to ensure interoperability with the EUDI Wallet. The EUDI Wallet can only be successful if an ecosystem exists for it, which all participants work on together. How this ecosystem is designed will determine the added value of the digital wallet.
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Photo Credits:
- Uwe Stelzig: IDnow
- Iris: geralt @ Pixabay