Digital Identity Meets Payments: Promise, Pitfalls, and the Pragmatic Path Forward. As Europe advances toward deploying the EU Digital Identity (EUDI) Wallet, many see payments as the killer user case — but is it really that simple?
A new white paper by the Smart Payment Association (SPA), in collaboration with the Secure Identity Alliance (SIA), cuts through the hype. Authored by Alain Martin and Debora Comparin, “Digital Identity Wallet for Payments” examines how the EUDI Wallet could interact with Europe’s payments ecosystem — and what it will take to make that work.
According to the authors, the most interesting use case of the EUDI wallet in payments is the initial KYC/onboarding of a new user. In a context of AI generated impersonation atacks, proving a user’s identity to a bank, with a high level of assurance and in a convenient way, minimizes the risk of fraud at enrollment and facilitates the compliance of Banks with the KYC/AML regulations.
By contrast, the use of the EUDI wallet for SCA will add complexity and cost for banks, while not
bringing significant benefits neither to the bank nor to the user. A third-party authentication method
provided by the EUDI wallet, requires agreements to be put in place and may not comply with all the
requirements of PSD2, such as dynamic linking and, possibly, user journey “obstacles”.
„Using the EUDI wallet as a means of payment should, in our view, be based on existing payment instruments and solutions, incorporated in the wallet, in order to maximise use of the existing acceptance infrastructure and payment system governance. These instruments may be current scheme cards or existing Account to Account payment solutions.
The use of the EMV and NFC standards to facilitate acceptance at existing POS terminals, would require an evolution of the ARF. The alternative of creating an altogether new payment system for the EUDI wallet will be a very complex, costly and lengthy task. We do not consider this to be realistic.
An EUDI wallet based on existing payment solutions will however compete with the established players and should differentiate to be adopted. We view the ability for the EUDI wallet to provide rich user information, at the time of paying, as such a differentiator. But this capability will require the adaptation of the acceptance infrastructure, a potentially significant effort.„
Read the paper to learn:
. What eIDAS 2 and PSD2/PSR mandate
. Why KYC and customer onboarding are the most promising early use cases
. Why SCA is a challenging use case
. How the EUDI Wallet can enrich payment information transmitted to the merchant
. How existing payment infrastructures can enable payment functionality within the wallet without reinventing the wheel
If you’re involved in digital identity, payments, or financial innovation, this white paper offers a grounded, expert view of what’s truly possible — and what’s not — when identity meets payments.
Download “Digital Identity Wallet for Payments” to explore the practical roadmap toward a trusted, interoperable European digital ecosystem.
Banking 4.0 – „how was the experience for you”
„To be honest I think that Sinaia, your conference, is much better then Davos.”
Many more interesting quotes in the video below:
