EUDI-Wallet

There is hardly anyone working with digital identification solutions in a corporate or government context who has not yet heard of or read about the European Union Digital Identity Wallet, or EUDI-Wallet for short. The new “digital wallet,” which is to be introduced as a mandatory standard across Europe, is intended to enable all citizens and businesses within the EU to securely manage identity data, official documents, and credentials. By the end of 2026, every EU member state must provide at least one wallet that is accepted in both the public and private sectors.

The EUDI-Wallet is a Central Component of the EU Digital Strategy

The EUDI-Wallet is intended to eliminate media discontinuities, fragmentation resulting from a wide variety of technological solutions in individual countries, and the resulting high costs of current identification solutions, marking an important step toward a future-proof, harmonized EU-wide infrastructure.

As a central component of this digital strategy, the wallet is intended to conform to an EU-wide coordinated IT architecture so that different implementations can work together interoperable. It is designed to support high levels of trust, cryptographic signatures, and verified attributes that can be processed in a machine-readable format by entities such as banks, government agencies, and businesses.

EUDI-Wallet in the Context of AMLR and eIDAS 2.0

Strictly speaking, the EUDI-Wallet is not a standalone project, but a new tool for identification processes that is being introduced and legally regulated on the basis of the revised eIDAS Regulation (“eIDAS 2.0”).

The amended eIDAS 2.0 Regulation on electronic identification and trust services establishes a uniform legal framework for this purpose, under which all EU member states are required to provide interoperable electronic identification means and mutually recognize them.

By basing the EUDI-Wallet on the eIDAS 2.0 framework, the goal is to achieve self-determination data, high security, and simple, cross-border use of digital identities, for example, for digital government services, but also for private-sector remote onboarding processes such as opening bank accounts or concluding contracts.

Impact of the EUDI-Wallet Introduction on the Financial Sector and Other Obligated Industries

The EU-AMLR Regulation, which must be implemented by July 2027, explicitly establishes the EUDI-Wallet as an acceptable high-security method for identification. Financial institutions and obligated companies in other sectors are required under this regulation to provide identification, authentication, and digital signatures via the EUDI-Wallet on an equal footing with other methods as part of their Know-Your-Customer (KYC) processes.

Furthermore, the personal data (PID) stored in the EUDI-Wallet is to be made available as the primary source for customer due diligence, enhanced due diligence, and reevaluation checks, which entails additional effort for all parties involved:

• Adjustments to meet compliance requirements
• Process revisions
• Integration effort.

Identifications via the EUDI-Wallet are also intended to be used within the framework of Know-Your-Business (KYB) processes; however, as of December 2025, this topic is still in the conceptual phase.

Particularly relevant services (not just in the financial sector) must accept EUDI-Wallet in the future if their customers consciously choose this option. For users, the use of the wallet remains voluntary, and they retain control over which data they share with which service.

Companies in the financial sector that must comply with AMLR requirements as part of their KYC and KYB processes benefit from service providers like WebID, which support them with a sophisticated portfolio of proven forgery-proof identification solutions, knowing full well that freedom of choice will become an essential factor for customer acceptance and trust, and that existing identification procedures will remain relevant.

Advantages and Disadvantages of the EUDI-Wallet

It is not yet clear how the EUDI-Wallet will be implemented in detail, as considerations regarding the various use cases are still partly in the conceptual phase. From this perspective, no legally valid statements can be made at this time regarding the eIDAS 2.0-compliant wallet to be introduced in Germany, which is why the following aspects should be viewed with caution.

The Advantages of EUDI-Wallet

• EU-wide uniform requirements regarding the IT architecture of the country-specific EUDI-Wallet can help harmonize markets.
• The intended interoperability can help simplify identification processes for citizens across national borders.
• The greater data sovereignty that will lie with users in the future can help build trust.

The Disadvantages of EUDI-Wallet

• In Germany, the current plan is to allow only the eID as a means of identification for the initial issuance of an EUDI-Wallet. Public acceptance of the eID is currently rather low, which could then also affect acceptance of the EUDI-Wallet.
• eID cards initially issued in error are no longer checked, which invites abuse and thus carries a higher risk of ID fraud, even with the EUDI-Wallet.
• At the planned go-live, the German government’s EUDI-Wallet will only accept German identification documents and residence permits; the approximately 4.9 million citizens holding IDs from other EU countries will only be able to use the wallet for identification at a later stage.

Conclusion

The EUDI-Wallet, as a central component of the EU-wide digitalization strategy, is expected to be available in Germany in early 2027. All companies offering identification procedures must take the necessary measures to enable the EUDI-Wallet as an additional procedure within their systems. However, it is still unclear which technical requirements must be implemented in detail.

Furthermore, it remains unclear whether and how private-sector providers can offer a wallet based on the eIDAS 2.0 Regulation that corresponds to the “government-issued” EUDI-Wallet.

And although the use of eID solutions for reading ID cards is making progress in Germany, the major breakthrough has not yet occurred, largely due to complicated activation processes and a continued lack of use cases, which is sometimes referred to as the “chicken-and-egg problem.” Against this backdrop, companies are well advised to accommodate customers’ preferences by offering a diverse range of identification solutions.