New EU digital wallet may limit the need for third-party services

Why we write about this topic:

With an increasing need for digital security, people may want more control over their data and money.

The EU plans to introduce a new digital identity service, effectively limiting reliance on third-party services for online authentication, the Parliament announced in a press release. The new European digital identity framework (eID) digital identity framework would provide EU citizens with digital access to key public services across EU borders.

The eID will allow citizens to identify and authenticate themselves online (via a European digital identity wallet) without having to resort to commercial providers, as is the case today – a practice that raised trust, security and privacy concerns. It would also give users full control of their data and let them decide what information to share and with whom.

The Industry, Research and Energy Committee adopted its position on the proposed update of the eID by 55 votes to 8, with 2 abstentions.

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Privacy, security and accountability

In their amendments, MEPs propose to make the European Digital Identity Wallet a tool that can also read and verify electronic documents, and allow for peer-to-peer interactions. They propose measures to strengthen privacy and cybersecurity as well as to register all transactions in order to hold third parties accountable.

Using the EU wallet will always be voluntary. MEPs also does not want to treat citizens who choose not to adopt it differently than to those who do. The scheme would require each member state to notify at least one “Wallet” under a national eID scheme to make them interoperable at EU level.

The draft legislation includes provisions to securely request, obtain, store, combine and use personal identification data and electronic certificates, that can be useful when authenticating online and offline and to access goods and public and private services.

“Reliable and all-in-one”

Rapporteur Romana Jerković said: “With the European Digital Identity Framework, we want the EU to become the first global region with a governance framework for trusted digital identities. The Digital Wallet will become a reliable, all-in-one identity gateway that puts citizens in full control of their own data and gives them the freedom to decide exactly what information to share, with whom, and when. From social, financial, medical, and professional data, to contacts and much more, it will make it possible to store personal credentials within a single digital ID. Digital identity is no longer just a nice-to-have feature, but a new driver of civic engagement and social empowerment and a tool for an inclusive digital Europe.”

With 57 votes to 7, with 3 abstentions, MEPs also gave their green light to enter into interinstitutional negotiations. Formal approval is pending during the 13-16 March plenary session.

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Research

A study from the European Parliament research service highlights that since the pandemic, the provision of public and private services has been becoming increasingly digital. At the same time, entities such as banks, electronic communication service providers and utility companies, some of which are required to collect identity attributes, are acting as verified identity providers.

Existing digital wallet solutions are typically linked to payment solutions, and allow users to store and link data in a single seamless environment on their mobile phones. However, according to the Commission, this convenience comes at the cost of loss of control over personal data, while these solutions are disconnected from a verified physical identity, which makes fraud and cybersecurity threats more difficult to mitigate.