News & Insights

The European Digital Identity Wallet (EUDIW) is poised to reshape the digital identity landscape across the European Union. With mandatory acceptance set to take effect by the end of 2027, financial institutions are actively exploring their obligations and preparing for the changes ahead.

Over the past months, INNOPAY has supported the eIDAS 2.0 Taskforce of the Dutch Payments Association in assessing the implications of the proposed eIDAS 2.0 regulation for the use of the EUDIW in online payments. Working closely with Dutch banks, we identified three key conclusions:

1. Mandatory for 2FA with online identification:

The EUDIW must be accepted as a means for two-factor authentication (2FA) where (i) strong user authentication (SUA) is required and (ii) the authentication serves an online identification purpose.

2. EUDIW alone is not sufficient under current Strong Customer Authentication (SCA) requirements:

SCA under PSD2 entails more than just 2FA. Given the current regulatory requirements, full mandatory acceptance of the EUDIW for 2FA in online payments is not feasible at this stage.

3. Limited scope of mandatory acceptance:

Beyond the use of the EUDIW for 2FA, eIDAS 2.0 does not impose additional obligations on payment service providers (PSPs) to accept other functionalities of the wallet (such as the acceptance of electronic signatures).

Read the full assessment by the Dutch Payments Association here: EU Digital Identity Wallet Assessment

We envision that utilising the EUDIW as a building block could enhance many future financial products and services, enabling greater innovation and efficiency in the financial sector. It is important to continue exploring these beyond-compliance opportunities for innovation and understanding their potential impact.

If you’re interested in the requirements and opportunities that the eIDAS revision and the EUDIW present for your organisation, please reach out to us.