500 Million Smartphone Users to Adopt Digital Identity Wallet by 2026

A significant shift is underway in the world of identity verification as digital identity wallets (DIW) are projected to be adopted by 500 million smartphone users globally by 2026. This growth marks a pivotal transition from traditional identity verification (IDV) methods to more advanced, secure, and user-controlled digital identity solutions, according to a Gartner report released on Tuesday.

The rise of portable digital identity (PDI) systems is driven by the need for a more efficient and seamless approach to verifying an individual’s credentials during digital interactions. Traditional methods, such as repetitive ID checks and selfie-based verification processes, are becoming outdated, making room for more streamlined solutions like the digital identity wallet.

The Limitations of Traditional ID Verification

Current identity verification (IDV) systems rely on users repeatedly providing core information like their name, date of birth, and address. In some cases, users are required to capture selfies to authenticate their identities during online transactions or account setups. However, these processes are far from ideal.

According to Akif Khan, VP Analyst at Gartner, the current approach to ID verification is too focused on core data and lacks flexibility to incorporate additional attributes that are becoming increasingly important in digital interactions. These include educational qualifications, proof of employment, and even healthcare information.

As more processes move online, there is a growing demand for a solution that can integrate multiple attributes while providing better security and control. This is where the digital identity wallet emerges as a game-changer, allowing individuals to store and share their verified information with ease and confidence.

What is a Digital Identity Wallet?

A digital identity wallet (DIW) is essentially a portable digital identity (PDI) solution that allows users to carry all their essential identity attributes in a single, secure digital format. These wallets give users control over their credentials, offering the flexibility to share only the necessary information during digital interactions. For example, instead of submitting their entire identity, users can share only their proof of employment or educational qualifications, depending on the requirement.

In the context of digital identity verification, a PDI solution provides a higher level of trust and security. Once a user’s identity is verified by a trusted entity, the identity assertion can either be stored with the verifying party in a centralized model or saved directly in the user’s digital identity wallet on their smartphone, creating a decentralized model.

Transition to Portable Digital Identity Solutions

The Gartner report emphasizes that the market is entering a transition period where PDI solutions are maturing rapidly. As a result, the demand for standalone IDV methods, which are cumbersome and repetitive, will decline significantly over the next five years. Portable digital identity wallets are expected to reduce the need for users to undergo the ID-plus-selfie process repeatedly, which has been one of the limitations of traditional IDV systems.

By 2026, many of the identity verification processes we use today will be replaced by digital identity wallet systems that allow users to maintain control over their security and privacy while sharing only relevant credentials during online interactions.

Global and Regional Initiatives to Promote Digital Identity Wallets

One of the most significant developments in this area comes from the European Commission, which is pushing all European Union member states to make a digital identity wallet available to their citizens by 2026. This initiative highlights the increasing global recognition of the importance of PDI solutions in digital transactions.

As governments and private sectors continue to prioritize secure digital interactions, the adoption of digital identity wallets will likely increase across different regions. This is expected to not only improve security but also provide individuals with a greater sense of control over their personal information.

Conclusion: The Future of Digital Identity is Here

The growing adoption of digital identity wallets reflects the market’s shift towards more efficient, secure, and user-friendly identity verification processes. With 500 million smartphone users expected to regularly use these wallets by 2026, it is clear that the future of identity verification lies in portable, flexible solutions that offer users control over their data.

As the digital landscape continues to evolve, so too will the ways in which individuals interact and verify their identities online. The transition to digital identity wallets promises to not only simplify these processes but also enhance privacy and security for users around the world.

Disclaimer: The predictions and figures mentioned in this article are based on reports and research from trusted sources. Actual outcomes may vary depending on market conditions and regulatory developments.