Gartner, a research and consulting firm, predicts that by 2026, at least 500 million smartphone users will adopt digital identity wallets (DIW). These wallets allow users to securely verify their identity and make claims without repeatedly submitting identity documents and selfies.
Today, many online services rely on identity verification (IDV), where users upload a picture of their ID and a selfie. This process is time-consuming and not well-suited to the growing demand for online services, such as healthcare and employment verification.
Portable digital identity (PDI) solutions, like DIWs, aim to solve these challenges. These wallets store a user’s verified identity information and can include attributes like education and employment details. Unlike the current system, where identity data is shared frequently, DIWs allow users to share only what’s needed. For example, they could prove they are over 18 without disclosing their exact date of birth.
“The market is entering a transition period as PDI solutions are starting to mature, which in the next five years, will reduce the demand for standalone IDV,” said Akif Khan, VP analyst at Gartner.
Governments are also moving forward with digital identity solutions. By 2026, EU member states will be required to offer DIWs to citizens under the eIDAS regulation. However, organizations do not have to wait. According to Khan, companies can adopt DIW technology now to improve security and streamline processes like employee onboarding.
With the rise of PDI, the need for traditional IDV methods will decrease, enhancing security and user experience across digital platforms.