Europe opened the door to a common pockets. The inventor of the online needs to get entangled

Imagine travelling to the destination of your dreams. A tropical paradise by the sea? A charming mountain village? A sun-drenched castle surrounded by vineyards? Take your pick. All you need to do is pack a smartphone.

You take a taxi to the station, scan a turnstile and board a train to the airport. When you arrive, you walk through a biometric corridor and straight to your plane. After your flight lands, you pick up a rental car. You show a digital driver's license to unlock the door.

You drive to your new home. On the way, you stop at a store and pick up groceries, household goods, and, if you feel like it, a case of beer. If you're in the US, you might also grab a gun. All purchases are approved invisibly. You leave the save and back into the car.

You park in front of your beautiful new house. You open the front door with a look on your face and collapse onto the couch. With a quick glance at your phone, you open a bank account, schedule bills, and sign up for services.

The

The latest gossip from the EU tech scene, a story from our wise old founder Boris and questionable AI art. Free in your inbox every week. Sign up now!

Suddenly, panic sets in: you've forgotten your wallet. Your cards, passport, medical records, legal documents and educational certificates are missing. But then you remember: everything is safely stored on your phone.

Is this a digital dream or a high-tech nightmare? Either way, it's slowly becoming a reality.

The digital identity

Digital identities are already widely used in financial services, border controls and age verification. Google and Apple wallets are now common tools for payments and Data storage.

As the possibilities expand, paper documents and plastic cards are being thrown into the dustbin of the past. But the path to implementation is tricky.

Digital wallets still severely limit interoperability between apps and services. Use cases are limited and service availability is limited. The technology has also raised concerns about mass surveillance and data theft.

For digital wallets to reach their full potential, security, accessibility and interoperability must be guaranteed. In Europe, these guarantees are already underway.

By 2026, the EU will embed them in a new system: the European Digital Identity (eID).

Margrethe Vestager, the former EU Digital Commissioner, said the eID would drastically reduce bureaucracy. Image credit: European Commission

Embedded in an electronic wallet, the eID will store, display and verify credentials. With just one app, citizens could manage their finances, access services, sign contracts and travel to their dream destination – all while keeping their data under their control.

The plan has been met with both praise and criticism. Supporters include Tim Berners-Lee, the inventor of the World Wide Web. He believes that digital wallets can revive his founding vision: a free and open Internet.

The universal wallet

Shortly after the Internet's birth in 1989, the tech giants took over. Berners-Lee watched grimly as they exploited his brainchild for data. Our information became the fuel of their business empires.

To take back power, we need to take back control of our data. “Wallets enable that,” Berners-Lee tells TNW. “They let me keep all my data in one place and decide how, with whom and when I share it.”

The 69-year-old has a plan to prove that claim. With his startup Inrupt, he has spent the last seven years developing tools to decentralize the internet. This summer, they resurfaced in a new product: a universal data wallet infrastructure.

The system is based on open standards and provides interoperability between multiple services. Information is securely hosted in personal data “pods” that allow reuse across apps, services and AI systems, but the user always remains in control.

It is an approach that turns the prevailing model on its head.

The European standard

Today's digital wallets are isolated “point solutions” with limited use cases. The services they access often request data from users. No single wallet can serve them all. “It's like I need a different credit card for every business,” says Berners-Lee.

Inrupt's wallet opens up data silos and connects multiple apps. Berners-Lee describes it as “an extension of the web.”

“Almost everything I can do with an app today, I can do with my data wallet tomorrow,” he says. The eID could bring this future closer.

Berners-Lee has high hopes for the project. He expects the EU to set “important benchmarks” for wallets and enforce “a standard” for credentials.

“Once this foundation is widely available, consumers and citizens will expect their wallets to be able to store more and more types of data,” he says. “And companies will think up more and more ways to serve them through their wallets.”

Berners-Lee (center) and Inrupt co-founder John Bruce (right) presented Inrupt's plan at the TNW conference. Image credit: The Next Web

The EU Wallet

The eID is also causing a stir at Mitek, an identity verification company. The company offers authentication for banking services, biometric scans at borders and age-restricted purchases, all of which could benefit from the EU's plans.

Chris Briggs, senior president of identity at Mitek, calls the eID “a true native digital identity.” He expects the project to set “a global standard” for wallets.

Briggs believes the plan hits a regulatory turning point: protecting consumers and encouraging innovation. This stands in stark contrast to progress on the other side of the Atlantic.

In the US, there is a severe lack of interoperability standards and inadequate accessibility. The result is a slower adoption of contactless payments and digital IDs.

“You have to build an ecosystem,” says Briggs. “You need standards and interoperability. And the eID creates that for Europe.”

The system will require every EU state to offer a “European Digital Identity Exchange”, and research suggests that this will be very welcome.

The backlash of surveillance

Digital wallets are becoming increasingly popular worldwide. In 2017, they made an estimated 18% of online transaction value and 10% of consumer spending at the point of sale. Last year, these figures rose to 50% and 30% respectively.

And payments are far from the only attraction. Current survey found that over half of consumers are interested in other uses for wallets, with the figure rising to over 75% among Generation Z and Millennials.

They may soon have the capabilities they crave. Ben Wood, chief analyst at technology research firm CCS Insight, expects the capabilities to expand rapidly. “I expect digital wallets to become increasingly important as more and more aspects of daily life become digitized,” he says.

Electronic identity can speed up this process. But first the EU must quiet the alarm bells about surveillance.

Ursula von der Leyen, President of the European Commission, said the final eID will be “one that we trust”. Image credit: European Commission

Critics claim that the eID could allow governments to track our every move. Last November, 552 scientists and researchers signed an open letter warning that the plan “significantly increases the potential for harm.”

Wallet companies say the fears are exaggerated. They argue that the technology actually improve Security and data protection.

Briggs agrees. “Your data is much safer in a wallet than in your back pocket,” he says. “You're walking around with a piece of plastic that anyone can copy, photograph or deepfake. If you have cryptographic controls … that only helps keep consumers safer.”

The wallet of the future

With strict rules, guaranteed interoperability and high fines for violations, the eID could strengthen the right to data.

Briggs believes an open framework is essential. He also wants the EU to provide robust data protection and consent mechanisms. “A closed electronic identity would be an obstacle to its introduction,” he says. “It must be based on a published open standard.”

If this framework is secured, the eID could lead to digital wallets becoming even more integrated into our lives.

Berners-Lee envisions endless possibilities.

A wallet will integrate hundreds of services. Fitness For example, apps will be linked to medical records to improve health analytics. Scientists will use the findings to develop new treatments – but only with your consent. AI agents will then manage the data on your behalf.

There is, however, a problem with the plan: smartphone batteries are still bad. A full charge lasts for about 10 hours of life on average – not ideal when an app is managing your life.

Of course, you could take a power bank or two with you. But that would ruin the dream of moving home with just a phone.

Fortunately, data companies have already proposed a solution. Instead of opening an app, they suggest accessing the wallet via biometric data.

One day, your face alone could take you to your dream destination. Forget the physical wallet – you won't even need a phone.