What if digital ID promised business growth through enhanced customer experiences? A meaningful chance to innovate rather than to regulate – or, for private businesses, to simply comply with approaching regulation.
A fresh perspective is needed to take advantage of the possibilities that digital ID presents, rather than stoking the fears of businesses and citizens. This is an opportunity to build new systems that bring mutual benefits to companies and their customers alike.
Turn regulation into revenue
Take the EU’s first pilot of eIDAS 1.0 – a digital identity wallet for its citizens. When the regulation was adopted in 2014, it failed to create any real incentive for private organisations to participate. If businesses didn’t adopt, their customers wouldn’t either.
Had eIDAS 1.0 emboldened organisations to simplify and improve their customer offering and experiences, it could have stimulated the necessary demand. Yet even with the advent of eIDAS 2.0, the EU could be guilty of continuing to focus on technical and legal architecture instead of economic models for business and the customer promise.
While the UK Government has also announced the launch of a GOV.UK wallet with access to the HM Armed Forces Veteran Card (and the promise of digital driving licences to follow), it’s not in a vacuum. Private entities like Apple and Google are already leagues ahead. With software engineers and designers dedicated to creating a user centric offering, Apple and Google wallets have been the go-to for payments, tickets, travel and more for their user bases.
Still, some people remain hesitant to get involved due to fear of private entities monetising their data, which would render both the users and their data a commodity. Similarly, they’re reticent to engage with state-sponsored wallet initiatives for fear of impingement on privacy and distrust of Government – or, in the case of European citizens, distrust of the EU’s true intentions. While this creates widespread inertia, it’s not an obstacle that’s impossible to overcome – here are four steps you can take to turn digital ID into an opportunity.
1. Know your audience
Some people don’t know how to set up a digital wallet and need excellent user-experiences. Others are waiting for a good enough reason to overcome their inertia of adopting. Businesses need to find those reasons and communicate them in the right way. Insight into audience pain points enables you to provide solutions that go beyond the obvious. While you’ll never capture the whole market, what matters is that you capture the right market by creating a use case that’s much stronger than the incumbent.
2. Create a compelling use case
Take ePrescriptions as an example. A quick scan of a QR code using a digital ID could provide easy access to your medication when abroad. This is a much better experience than trying to communicate with a pharmacist who speaks a different language, ensuring you have the right documentation, or queuing for hours when you could be enjoying your getaway.
The rigmarole of hiring a car abroad presents an equally compelling example. Scanning a QR code using a digital ID removes the laborious process of authenticating insurance payments plus separate booking, ID and driver’s licence checks. It allows you to collect your car in a matter of minutes rather than wasting precious vacation time in a drab waiting room with a broken fan. Perhaps your digital wallet could even open your hire car doors, so you don’t have to wait for the key either.
Cases like these offer solutions to pain points that most people can relate to, but they also bring business benefits too. For the hire car company, automated processes could resolve staffing issues, extend trading hours and significantly reduce costs over the long-term – offsetting initial investment in infrastructure. And if businesses are early adopters, customers will favour their experiences, so they’ll gain competitive advantage before other companies catch up. As for broader customer adoption, this may still come with friction.
3. Reduce the friction
The average customer journey spans multiple digital tools and channels. It can feel disjointed, especially if the user is required to log into different accounts. Business could counter this by creating a whole new channel via the digital wallet.
Rather than using the wallet purely for authenticating payments or storing tickets, customers could access rich, connected digital experiences that remove the need for different accounts or apps. Entertainment companies, for example, could provide tickets with personalised digital experiences – Apple and Ticketmaster are already on the case.
What’s more, the advent of Agentic AI and AI agents with access to digital wallets presents further opportunity for improving customer experiences and unlocking new revenue streams for businesses.
If AI agents could remove the pain of forgetting to cancel a subscription, automate complex customer journeys or provide real-time assistance while travelling, businesses would see digital wallets as an exciting new channel that improves the customer interface. Digital wallets would also enable new revenue models, be it through monetising premium AI features, co-branded wallet experiences, or delivering greater operational efficiency.
Apple, Google, Amazon and VISA are all actively investing in AI agents and digital wallet integration, driving the future of customer engagement and creating new avenues for business growth.
4. Welcome possibility
While a degree of inertia will remain, it’s crucial to embrace the possibilities of inevitable change – to work with it rather than against it. Moreover, to work it to your advantage. For digital ID to bring real benefit, businesses must maintain focus on the importance of getting it right for their customers.
Do the work to understand the reasons for customer inertia and their barriers to trust. Open the aperture on the problem from the users’ perspective – their technical capabilities, political views and trust in government entities. What are their pain points and where can you add the greatest value to cut through that inertia?
This depth of insight enables you to create great customer experiences and great business opportunities. This is how you build confidence in possibility and shape your business for the future that’s coming – whether you’re personally opposed to it or not.
Yonder Consulting is a contributor to the EU co-funded Digital Identity Wallet Consortium, championing the voices of approximately 450 million EU citizens to shape and enhance future digital experiences.