The European Commission has revealed plans for a digital identification wallet that the 450 million residents of the 27-nation European Union (EU) bloc would be able to use to log into local government websites or pay utility bills.
The wallet is an app that EU citizens could install on their smartphone in order to prove their identity and access services online, share digital documents, or to prove a specific personal attribute, such as a medical certificate or professional qualification.
In addition to identity data, the wallet app could also hold medical prescriptions and official documents such as driving licences. A unique life-long number would be assigned to every EU citizen.
In the field of payment services, the app would support the fulfilment of strong customer authentication (SCA) requirements for account login and the initiation of transactions. According to the Commission’s proposal it would also enable the financial services sector to comply with customer due diligence requirements under EU anti-money laundering (AML) rules and suitability requirements stemming from investor protection legislation.
Access to the app would be secured using biometric data such as fingerprints or iris scans. The new service is conceived as being an alternative to log-in services provided by US-headquartered companies such as Amazon, Facebook or Google.
EU citizens will be able to voluntarily sign up for the EU digital identity, which the Commission calls ‘secure and transparent’, giving people the ability to decide if their data is stored, who it’s shared with, and how much information is available for sharing.
Current schemes cumbersome
Some EU countries already offer identification systems to their citizens but not all of these can be used cross-border. Some states have more than one scheme in operation and 19 digital identification schemes are currently used by 14 member states in total, covering almost 60 per cent of the EU’s population. But, as the Commission acknowledges, take-up is low, use is cumbersome and business cases are limited.
Since the Covid-19 pandemic has significantly accelerated the shift to online services, the need to address such limitations has become more urgent. This development is currently being addressed across the globe. Canada has just launched the latest iteration of its digital strategy, which includes a continued effort to introduce secure digital identities for citizens, as reported by our sister title Global Government Forum.
The Commission’s proposal is the result of an EU audit conducted throughout the bloc regarding the existing digital ID methods that are currently being used in the 14 countries.
The proposed wallets may be provided by public authorities or by private entities, provided they are recognised by a member state, the Commission says.
‘Common toolbox’ by September 2022
The plans were presented by the Commission’s executive vice-president for a Europe fit for the digital age, Margrethe Vestager, and internal market commissioner Thierry Breton on 3 June.
Member states have been invited to establish a common toolbox by September 2022 and to start necessary preparatory work immediately. This toolbox is to include technical architecture, standards and guidelines for best practices.
The Commission says it will work with member states and the private sector on technical aspects and intends to publish the toolbox in October 2022. Once the technical framework has been agreed, it will be tested in pilot projects.
The proposal estimates the European Digital Identity will have ‘quantifiable benefits‘ of up to €9.6 billion (about £8.3bn) and generate between 5,000 and 27,000 additional jobs over the five years following implementation.
Data collection concerns
However, the Commission’s plans have raised concerns about centralised data collection in the hands of governments. Patrick Breyer MEP of the German Pirate Party, which rose to prominence in the 2010s dedicating itself to reforming copyright and patent law, called for far-reaching changes to the EU’s proposal.
The lawmaker from Germany explained that citizens’ data must be stored decentrally on their own devices, not in government databases. “Entrusting our digital lives to the government instead of Facebook and Google is jumping out of the frying-pan into the fire,” Breyer said. “We must not allow the ‘European Digital Identity’ to become a lifelong unique identification number with which our digital lives can be monitored.”
Breyer added that biometric access restrictions are not safe and that bringing all data and documents together in one repository creates the danger of hacks and identity theft.
“EU citizens not only expect a high level of security but also convenience whether they are dealing with national administrations such as to submit a tax return or to enroll at a European university where they need official identification,” said Breton, unveiling the proposal. “The European Digital Identity wallets offer a new possibility for them to store and use data for all sorts of services, from checking in at the airport to renting a car. It is about giving a choice to consumers, a European choice. Our European companies, large and small, will also benefit from this digital identity, they will be able to offer a wide range of new services since the proposal offers a solution for secure and trusted identification services.”