The views expressed in this article are solely those of the author and should not be attributed to the European Payments Council.

The European Commission (EC) is now working on electronic identification (eID) and its further harmonisation across Europe as secure eID should be an essential feature in the digital world. We interviewed Lorena Boix Alonso, Director for Digital Society, Trust & Cybersecurity at DG CONNECT to know more about Europe’s digital future, eID and how European member states and citizens will be able to benefit from it.

How would you describe the European Digital Identity? 

The European Digital Identity should enable EU residents and businesses to identify themselves and to safely share certain personal information with public and private services across the Union. The European Digital Identity will be stored in a wallet on the mobile phone. This will make it convenient to share only the relevant information in a fast and user-friendly way under the citizen’s control. 

What were the main reasons for developing it?

Every time an app or a website asks an EU citizen to log on via a platform, there is very little awareness of what happens to this very personal data. With the European Digital Identity we want Member States to provide EU residents and business with a tool they can trust. They can control what data is used and how. In addition, the European Digital Identity should work all across the Union. If a student with a bachelor’s degree issued in Portugal, for example, wants to apply for a Master Degree in Spain, she/he should comfortably do so using the European Digital Identity to prove both her/his identity, but also the diploma already gained in Portugal. 

How will it actually impact European citizens? 

Citizens should be able to install the European Digital Identity wallet on their mobile phone. In addition to the ‘classical’ identification data (e.g. name, date of birth, place of living), they will be able to store and manage additional information and official documents in electronic format in the wallet. These may include a driving licence, medical prescriptions or education qualifications. Whenever citizens access an online service, they can decide exactly which information and which digital documents they wish to share. The technical requirements for the transfer of this sensitive information should ensure a high level of security and privacy. EU citizens will at all times have full control of their data. Furthermore, they should be able to share the data that they wish to share in an easy and convenient way. 

What does it mean for payments? Would there be any potential link with the review of the revised Payment Services Directive (PSD2)?

Digital identity solutions become increasingly relevant for the payment sector as financial services shift progressively from traditional face-to-face business towards the digital environment.

PSD2 requires all payment service providers to apply strong customer authentication (SCA) whenever a user initiates an electronic payment transaction or accesses its payment account online. According to our proposal for the European Digital Identity Wallet payment service providers will have to accept it for the SCA performance, if the client wishes to use the wallet. Additional SCA means can be offered, but I expect the European Digital Identity Wallet will play a key role for an efficient and safe SCA in the future.  

As announced in the Commission’s Retail Payments Strategy, the Commission is reviewing the PSD2 with a view to assessing if its provisions are still fit for purpose. In that context, and also depending on the outcome of co-decision process on the revised eIDAS Regulation, the Commission may assess the need for amendments to the PSD2 if needed to ensure a full consistency between the two legal acts. 
 

The European Digital Identity wallet will provide a secure and user-friendly tool for the identification of the customer and for the authentication of the payment. Therefore, the European Digital Identity could play a key role in making digital payments safer, more convenient and foster innovation in payment services. 

What are the key milestones of the European Digital Identity project? When will it become a reality for European citizens?

The Commission published the legislative proposal in June 2021. Now the Member States and the European Parliament are in the negotiations. The legislative procedure requires that they agree on the legal framework for the European Digital Identity Wallet. The European Parliament is committed to vote on its report in November 2022. I am optimistic that the Council can progress within a similar timeframe. If an agreement could be reached in 2023, the European Digital Identity Wallet could go live by 2024. 

At the Commission, we are currently undertaking several parallel projects (e.g. developing a technical toolbox and launching pilots for the wallet) to facilitate a fast uptake of the European Digital Identity Wallet.  The large-scale pilots will support the usage scenarios of the Wallet. Public and private sector service providers will integrate their systems with the Wallet. Let me highlight one concrete example: the pilot could demonstrate how the wallet user can authorise payments for products or services online and at physical points of sale. We extended the call for proposals to 17 August 2022. I am already looking forward to starting this practical phase of the implementation of the wallet. 

Another exciting project where the European Digital Identity Wallet should play a major role is the Digital Euro. Together with colleagues from other Directorates of the Commission we are cooperating closely with the European Central Bank in assessing how the Digital Euro could be designed and distributed. This investigation phase should be concluded by October 2023.