Navigating the Challenges: ECSAs Address European Digital Identity Plan’s Impact on Payment Systems

The European Credit Sector Associations (ECSAs) have raised concerns about the upcoming European Digital Identity (eIDAS 2.0) proposal. In a statement, they have called on the European Commission (EC) to remove payments from the scope of the new plan. The eIDAS 2.0 proposal aims to create a digital identity wallet, which will enable citizens across the European continent to verify their identity, access public and private services, and store sensitive digital documents in one secure app.

The ECSAs have expressed concerns about the wording of the legislation, saying that it seems to imply that the full payment sphere is included in eIDAS 2.0 on a mandatory basis. As a result, if widely-used cards and payment specifications were included in the new wallet infrastructure, “huge investments” would be required not only in the financial sector but also for the overall acceptance network, thus hitting merchants and service industries.

The digital identity wallet will enable citizens to interact with the public and private sectors by providing a secure and trusted identity verification system. The wallet will work as a centralized repository of sensitive personal information, including proof of age, medical prescriptions, and bank account information.

However, the ECSAs have voiced their concerns regarding the mandatory acceptance of the European Digital Identity Wallet (EUDIW) on payments. The plan, in its current form, also fails to address the question of liability, according to the ECSAs. “The ECSAs, therefore, recommend, in order to avoid the mandatory nature of the acceptance of the EUDIW in terms of strong customer authentication on payments, limiting such mandatory acceptance to the verification of the user’s identity only.”

The ECSAs’ concerns come even though a multi-country consortium consisting of banks and technology companies has already been chosen to deliver a cross-border payments pilot for the digital identity wallet. The consortium aims to deliver a proof-of-concept and a roadmap for integrating digital identity and payments in a cross-border environment.

The cross-border payments pilot highlights the potential of the eIDAS 2.0 proposal to transform the way citizens interact with the financial sector. However, it is essential to address the concerns raised by the ECSAs to ensure the plan’s success.

The ECSAs consist of the European Banking Federation, the European Association of Co-operative Banks, and the European Savings and Retail Banking Group. These associations represent over 90% of the banking sector in Europe, and their concerns are valid and essential to consider.

In conclusion, the success of the eIDAS 2.0 proposal depends on addressing the concerns raised by the ECSAs regarding payments and the mandatory acceptance of the European Digital Identity Wallet. By limiting the mandatory acceptance of the EUDIW to the verification of the user’s identity only, the plan could avoid placing the burden of costly investments on merchants and service industries. The EC must listen to the concerns raised by these associations and address them accordingly to ensure the success of the digital identity wallet initiative.

Explore more

Microsoft Dynamics 365 Finance Transforms Retail Operations

In today’s hyper-competitive retail landscape, success hinges on more than just offering standout products or unbeatable prices—it requires flawless operational efficiency and razor-sharp financial oversight to keep pace with ever-shifting consumer demands. Retailers face mounting pressures, from managing multi-channel sales to navigating complex supply chains, all while ensuring profitability remains intact. Enter Microsoft Dynamics 365 Finance (D365 Finance), a cloud-based

How Does Microsoft Dynamics 365 AI Transform Business Systems?

In an era where businesses are grappling with unprecedented volumes of data and the urgent need for real-time decision-making, the integration of Artificial Intelligence (AI) into enterprise systems has become a game-changer. Consider a multinational corporation struggling to predict inventory shortages before they disrupt operations, or a customer service team overwhelmed by repetitive inquiries that slow down their workflow. These

Will AI Replace HR? Exploring Threats and Opportunities

Setting the Stage for AI’s Role in Human Resources The rapid integration of artificial intelligence (AI) into business operations has sparked a critical debate within the human resources (HR) sector: Is AI poised to overhaul the traditional HR landscape, or will it serve as a powerful ally in enhancing workforce management? With over 1 million job cuts reported in a

Trend Analysis: AI in Human Capital Management

Introduction to AI in Human Capital Management A staggering 70% of HR leaders report that artificial intelligence has already transformed their approach to workforce management, according to recent industry surveys, marking a pivotal shift in Human Capital Management (HCM). This rapid integration of AI moves HR from a traditionally administrative function to a strategic cornerstone in today’s fast-paced business environment.

How Can Smart Factories Secure Billions of IoT Devices?

In the rapidly evolving landscape of Industry 4.0, smart factories stand as a testament to the power of interconnected systems, where machines, data, and human expertise converge to redefine manufacturing efficiency. However, with this remarkable integration comes a staggering statistic: the number of IoT devices, a cornerstone of these factories, is projected to grow from 19.8 billion in 2025 to