Identity Wallets as Infrastructure

The world of digital identity wallets is about to get a lot more interesting. The European Union is rolling out EIDAS v2 ; Mobile Drivers License adoption is accelerating across the United States (recent example include New York and California ); and the critical standards supporting all of this (including, inter alia, ISO 18013-5 and Verifiable Credentials ) are increasingly well-established. It’s a pretty safe bet that within the next 3-5 years a significant majority of internet users will be storing at least some of their credentials in digital identity wallets (hereinafter, simply “wallets”).

That uptake is why it’s time for us to stop thinking about these wallets as an end-user application or service, and instead start thinking about them as ‘infrastructure’.

Rethinking Wallets: From Service to Infrastructure

Online services (and apps) are inherently competitive. Take personal task management systems as an example. There are lots of them on the market—OmniFocus, the Amazing Marvin, Remember the Milk, Todoist, Toodleoo… some are even baked into operating systems and/or manufacturer ecosystems, such as ‘Reminders’ in the Apple universe.

And that’s fine. The basic features are pretty much the same (create task, check-off task as done) but different systems then offer different capabilities which may or may not be useful to me, and which I may or may not want to pay for. Some features—tagging tasks, for instance—start out as USPs for one or two vendors, but become sufficiently in-demand that they are now table stakes for all task management tools.

Why Wallets Are Not Like Other Apps

So why should wallets be any different, you ask? Perhaps I will need features in my wallet that not everyone will want, just like my physical wallet. Example: I am in the US several times a year for work purposes. The US is a much more cash-based economy than the UK. In the UK, I now seldom carry any physical cash with me (well, except when I’m out riding my bike, when I usually have a £20 note for emergencies). In the US, I do. USD bills are annoyingly longer than Sterling notes. Hence, my wallet needs different dimensions to many wallets sold in the UK. To put in another way, I need my physical wallet to have native support for both USD and GDP.

The Limitations of Digital Identity Wallets

So what’s the difference with a digital identity wallet?

Simple: if my physical wallet doesn’t happen to have native support for the currencies I need to use, workarounds are easy for me to implement. I can fold the bills up a different way to get them to fit. It’s not perfect, sure, but it will work.

This is not true, however, for my digital identity wallet. If, for example, a particular nation state decides that the only valid wallet for their national credential is their special national wallet, and that wallet happens not to support some feature of Verifiable Credentials that everyone else relies on (or isn’t updated quickly enough, or…) then I’m stuck. My only option is to run two separate wallets, and that situation can escalate pretty rapidly.

“But,” I hear you say, “this seems like a very first-world, international jet-setter problem to have!” Sure: and now imagine that other institutions start down a similar path. Joining a supermarket loyalty scheme? Have a wallet! Opening a bank account? Have a wallet! Need your education credentials, your professional accreditation, or your benefits eligibility? Yep, more wallets. It won’t be long before I can’t remember which wallet a particular credential is in; and the credential recovery process if (when!) I lose my device, or forget to transfer some of my one-time-use wallets when I upgrade, doesn’t bear thinking about. Wallet proliferation will inhibit adoption.

The Power of Wallets as Infrastructure

Businesses and software vendors alike need to stop thinking about the wallet as a feature. The wallet is really an infrastructure component. What do I mean by ‘infrastructure’ in this context? Think railroads or electrical grids : we all agree on at least the basics of what they do and how they work. They are large-scale and (within context) broadly available. And the real value comes not from the railroads or the grids themselves, but from the services we can build on top of them. In other words: they are in essence consistent, interoperable, ubiquitous and foundational. Or, as Webster’s has it: “a substructure or underlying foundation; esp., the basic installations and facilities on which the continuance and growth of a community, state, etc. depend”.

So let’s consider the wallet. I posit that the most likely end state for wallet availability is that most people—consumers, employees, and citizens alike—will get their wallet from their cellphone provider. They won’t choose their provider on the basis of which wallet they get; they will simply use the default wallet from that provider. Because they won’t really care about the features of the wallet itself. They will simply want it to be easy to use, reliable and secure in operation, and broadly accepted, so that they can use it to access a wealth of digital, physical, and hybrid services.

That outcome is actually to our collective benefit. Personal digital identity is a game-changer for a huge swathe of areas across our digital landscape: usability, accessibility, inclusion, customer retention, security, and privacy to name a few. There are consequent benefits (improved customer acquisition/retention, better security and privacy posture, cost-savings, and so on) to enterprises and other large organisations including public services at both local and national levels.

A New Architecture for Identity

What’s more, if we think about wallets as part of the digital identity infrastructure, then it opens up some interesting and important new architectures. Wallets can provide signals . Wallets can be “Counselors” . Our enterprise deployments can proactively acquire and/or respond to input from wallets. Wallets become part of the continuous identity landscape .

Whether we like it or not, wallets are infrastructure. Let’s make sure to make that infrastructure as simple and as useful as possible for everyone.

If you’re interested in other thoughts I have on digital identity, privacy, and corporate governance, I encourage you to read through this site or follow me on LinkedIn .