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

Mastering Make to Stock: Boosting Inventory with Business Central

In today’s competitive manufacturing sector, effective inventory management is crucial for ensuring seamless production and meeting customer demands. The Make to Stock (MTS) strategy stands out by allowing businesses to produce goods based on forecasts, thereby maintaining a steady supply ready for potential orders. Microsoft Dynamics 365 Business Central emerges as a vital tool, offering comprehensive ERP solutions that aid

Spring Cleaning: Are Your Payroll and Performance Aligned?

As the second quarter of the year begins, businesses face the pivotal task of evaluating workforce performance and ensuring financial resources are optimally allocated. Organizations often discover that the efficiency and productivity of their human capital directly impact overall business performance. With spring serving as a natural time of renewal, many companies choose this period to reassess employee contributions and

Are BNPL Loans a Boon or Bane for Grocery Shoppers?

Recent economic trends suggest that Buy Now, Pay Later (BNPL) loans are gaining traction among American consumers, primarily for grocery purchases. As inflation continues to climb and interest rates remain high, many turn to these loans to ease the financial burden of daily expenses. BNPL services provide the flexibility of installment payments without interest, yet they pose financial risks if

Future-Proof CX: Leveraging AI for Customer Loyalty

In a landscape where customer experience has emerged as a significant determinant of business success, the ability of companies to adapt and enhance these experiences is crucial. Modern research highlights that a staggering 70% of customers state their brand loyalty hinges on the quality of experiences they anticipate receiving. This underscores the need for businesses to transcend mere transactional interactions

Are Bribery Allegations Rocking Microsoft Data Center Project?

The UK’s Serious Fraud Office (SFO) has launched an investigation into an alleged international bribery case. The case involves a UK-based company, Blu-3, and former associates of the Mace Group. It is linked to the construction of a Microsoft data center situated in the Netherlands. According to the allegations, Blu-3 paid over £3 million in bribes to former associates of