In the United States, digital wallets are often associated with big tech firms like Apple and Google. However, the European Union has launched a new program that could not only lay the foundation for government-issued wallets but also be the blueprint for widespread global adoption of digital identification programs.
As Christopher Miller, Emerging Payments Analyst at Javelin Strategy & Research, detailed in the report Digital ID Adoption Requires Digital ID Acceptance: How Payments Can Lead the Way, the EU digital wallet mandate is one of many forces driving the momentum behind digital IDs. More important, this movement has created a significant opportunity for payment providers to gain traction in a competitive market.
A Good Gauge
In addition to the mandate that governments institute digital wallet and digital ID programs, the European launch has a notable factor. By next year, EU merchants, government agencies, and other organizations will be required to accept digital IDs in daily operations.
This means the EU will soon have a comprehensive program in place.
“That’s a big deal; that suggests the direction,” Miller said. “So far, what that has resulted in is a bunch of pilots that have gone through various processes, because the deadline is 2026, not 2025. They’re working through various questions: How does it work? What are the standards? What are the problems?
“What you’ll have by the end of that is a pretty good body of evidence to look at if you are in some other area of the world—say, the United States—and are interested in seeing what happens when you have widespread availability and widespread acceptance.”
Although the EU’s program will be a compelling case study, it won’t be fully applicable to the United States because U.S. lawmakers aren’t likely to mandate digital ID issuance or acceptance. Still, the EU’s efforts could shape the standards that eventually emerge worldwide.
For instance, a global company may have significant operations in the European Union and the United States. Once it shifts its policies and procedures to accommodate the various formats of EU digital wallets next year, it would likely push for standards to govern its U.S. operations.
Across many industries, but especially in the travel sector, initiatives have increasingly sought to implement global standards. It follows that the technical standards for how digital ID systems operate are likely to converge and create global norms.
“That’s not to say that will happen next year, or that the U.S. will unilaterally adopt the EU standards,” Miller said. “That’s unlikely to be what happens, but the directions that are being chosen (by the EU) are likely to be influential. If you wanted to know what things might look like three to five years down the road in the United States, this is a good gauge.”
U.S. Progress
However, just because the United States isn’t likely to legislate digital ID adoption and acceptance doesn’t mean there hasn’t been substantial progress.
Across a series of reports, Miller has tracked the status of digital identification programs state by state. He found that many states have launched new programs or expanded the functionality of their digital IDs since last year’s report.
The launch process for U.S. digital IDs typically begins with a state-issued mobile app that is then added to the leading wallets such as Apple, Google, and Samsung.
For example, California issued a DMV wallet app several years ago but just this year added the capability for the digital ID to be included in Apple and Google wallets. Similarly, Arizona’s digital ID was compatible with Apple and Samsung wallets but only recently added support for Google.
All told, the report found that nine states expanded their digital ID programs in various forms since last year’s study.
“2025 saw pretty substantial growth, and as I project this forward, I think 2026 is likely to see continued growth at that pace or even a little bit faster,” Miller said. “There are a bunch of programs that were backed up by states dealing with the pandemic and its aftermath, where figuring out your digital ID program was not Job One.
“We’re just reaching the point where states that had lots of discussions are turning those into actual launches. We’ve reached very close to half of all states—that’s not the same thing as saying half of all people—but half of all states at least have issued some form of digital ID.”
Availability, Acceptance, and Adoption
Making digital IDs available is just the first step. As a comparison, the wide-scale adoption of digital IDs is likely to follow a similar path as contactless payments through digital wallets.
The technology that drives tap-to-pay has been around for some time, but for the technology to become ubiquitous took years. Now, the places where Apple Pay or Google Pay aren’t accepted have become the exception rather than the rule.
Digital IDs are at the opposite end of this cycle, where acceptance is the exception. However, over the next two years, most states and people will have a program available to them. This will drive the development and implementation of technologies to facilitate digital ID acceptance at merchants or agencies.
After availability and acceptance comes the final piece of the puzzle: adoption. Some obstacles stand in the way of adoption, such as building consumer awareness and confidence. For organizations, even if all the tech is available to accept digital IDs at the point of sale, many will wonder if the benefits of digital ID acceptance outweigh the expense.
However, those organizations that take the plunge will have significant advantages, starting with security.
“We think that the acceptance of digital identification is a point-of-sale activity,” Miller said. “You accept it, not always, but oftentimes in conjunction with a purchase. That might be, for example, proof of age when you’re buying age-restricted items, or it could be proof of identity when you are purchasing prescriptions.
“You can imagine a lot of times where you must, in addition to paying for something, also prove that you are the person who is allowed to pay. You can then further layer on top of that the notion of a digital ID plus a payment credential being an even more secure form of that payment credential. That is much further down the road, and people building out the infrastructure that combines these things is further out.”
Payments Can Lead the Way
As organizations develop the technology to incorporate digital IDs, a substantial opportunity emerges for payment companies.
“Payments can lead the way in digital ID acceptance because the infrastructure that is used to capture digital IDs in various transactions is often exactly the same as that which is used to capture tap-to-pay,” Miller said. “In some cases, it may not be exactly the same, but it’s going to need to be integrated with all of the same systems. If you are selling, say, point-of-sale systems, you need to be thinking about adding the capability to accept digital IDs.”
Players in payments have many other considerations as they explore digital ID acceptance. Beyond how a payment type and a digital ID could be integrated together, firms should also explore how they could be integrated with reporting, compliance, or even inventory functions.
Additionally, payment firms will have to consider how the process works at the point of sale, and what training employees will require to ensure compliance with laws and regulations.
The lion’s share of this outreach and education will be left to payment companies. Although state governments will issue digital IDs and merchants will play their part in employee training, building the infrastructure and driving adoption will mostly be beyond their purview.
While this will require additional groundwork for payment providers, the end justifies the means.
“I think that to the extent to which payment firms take the lead in performing that work, they create a market opportunity for themselves, because there will be other non-payment companies that want to try and provide these kind of services as add-ons,” Miller said.
“If you’re a payment company, you can say, ‘Look, this isn’t an add-on, it’s integrated with your system. It’s a feature that is simple to integrate and it’s not adding another company to your portfolio.’ I think that’s the key point.”
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