German telcos try out EU's digital ID scheme

Deutsche Telekom, Telefónica and Vodafone are field-testing the EU’s digital ID scheme in anticipation of a broader rollout.

It is part of a large-scale trial being carried out by an EU-organised consortium called ‘Potential’. It is taking place in 19 countries across the bloc. The field test by DT et al will see smartphone-based digital identity wallets used for opening bank accounts, applying for digital driving licences, and car rentals. Tests for online citizen services that require e-signatures are already taking place.

The trial falls under the auspices of the amended Electronic Identification, Authentication and Trust Services (eIDAS) regulations, which were adopted two weeks ago. The aim is to harmonise the technical framework for carrying out know-your-customer (KYC) checks across the EU, so that people both at home or abroad – in the EU at least – can simply use a centrally-issued digital ID rather than a physical equivalent.

“Every time a Website asks us to create a new digital identity or conveniently log in via a large platform, we actually have no idea what is happening with our data. This is why the Commission will soon propose a secure European digital identity. One that we trust, and that citizens everywhere in Europe can use to do everything from pay taxes to rent a bike,” said Commission President Ursula von der Leyen, in a statement on Monday.

“Whether wallet, banking or mails – every day, many people go about their daily lives with their smartphone as a matter of course. It is therefore only logical to add another important facet to life in the digital cosmos with a smartphone-based digital identity,” said Valentina Daiber, chief legal and corporate affairs officer at Telefónica. “Among other things, digital identities speed up interaction between public authorities and citizens, making the smartphone an even more important companion for everyday life.”

On the one hand, there is an argument for keeping citizens’ credentials in a single, secure location – sharing them with, rather than storing them on dozens of online services, each with varying degrees of success when it comes to defending against breaches. There is also a case for putting end users in control of their personal data, rather than surrendering it to ad-funded Internet giants.

On the other hand though, even with a central repository for KYC information, users are still likely to have to enter their name, address, contact and payment details for many of the online shops or service they use. So there will still be plenty of faff to contend with; plus sharing that information still risks exposure to potential data leaks and therefore identity theft.

Meanwhile, some people will undoubtedly be concerned that it could turn the EU into an unwitting online gatekeeper, by requiring companies to implement its digital ID scheme and then imposing onerous terms and conditions regarding its use. Larger companies won’t find that too challenging, but smaller, independent businesses might.

Then of course there is the spectre of Big Brother, which is conjured forth whenever a central authority comes up with a new ID scheme.

It is understandable. Especially when digital IDs are considered alongside some of the EU’s other projects, like central bank digital currencies (CBDCs), for example, which have the technical capacity to trace everyone’s financial transactions. People will ask – quite rightly – where all this is heading.

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