First, digital wallets replaced paper cash, credit cards, and physical wallets. Now, as they become more common in people’s daily lives, digital wallets are being used for much more than just payments. They’re becoming a convenient and secure way to store and use things like event tickets, transit cards, and loyalty programs. A new feature that is starting to gain attention is the use of digital IDs.
However, the technology for digital IDs is still new, and there are some challenges that need to be solved before digital IDs can completely replace physical ones. Alan Stapelberg, a product manager for Digital Wallets, explained this during an interview with PYMNTS.
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“The first and most important step to using digital IDs is creating solid, complete standards,” said Stapelberg. “To use your digital identity, two parties need to communicate, and standards ensure devices work together, even when they’re made by different companies.”
He also pointed out Google’s recent progress in this area, such as adding the option to store California driver’s licenses in Digital Wallets. These steps are important for the growth of digital IDs.
How Digital IDs Can Grow and Expand
Recent research from PYMNTS Intelligence suggests that at the same time as some humans are the use of virtual wallets for IDs, simplest approximately eight% of customers are actively doing so. To increase this wide variety, Stapelberg highlighted the need for enterprise requirements like ISO 18013-five. This wellknown is already utilized by Digital Wallets to ship ID information to TSA readers at airports. These requirements assist make certain that virtual IDs can be used easily across special gadgets, although the ones gadgets are from one-of-a-kind organizations.
Google has been running with groups like the ISO and the World Wide Web Consortium (W3C) to push forward the adoption of virtual IDs. As digital IDs emerge as greater popular, there could be a more want for collaboration between organizations, governments, and other businesses to make certain the whole thing works collectively easily.
One of the biggest challenges is supply and demand. On the deliver facet, depended on assets like nation DMVs and government organizations need to create and offer digital IDs. On the call for facet, users need accurate motives to exchange to the usage of digital IDs, which means that growing functions that lead them to less complicated, extra bendy, and more secure than physical IDs.
“Once you have a digital ID, you need to establish who can accept it,” Stapelberg added.
Currently, Google Wallet supports digital IDs in five U.S. states, including California. Stapelberg noted that digital IDs have several advantages over physical IDs, especially when it comes to privacy and security. For example, digital IDs allow users to share only the information that’s needed. When buying alcohol, for instance, you would only need to prove you are of legal age rather than sharing all the personal details typically on a driver’s license.
Stapelberg said that the standards for digital IDs have been designed with privacy in mind. Government-issued digital IDs in Google Wallet are encrypted, meaning personal information stays secure even if the user’s phone is lost or stolen. This level of security makes digital IDs not only a good alternative but possibly a safer option than physical IDs.
The Global Future of Digital Wallets
Expanding the usage of digital IDs comes with demanding situations much like what was confronted when contactless payments had been added. While it will probably be faster for human beings to use virtual IDs on line, it’s going to take greater time for in-individual use to come to be widespread. This is due to the fact shops and other places will want to replace their generation, teach staff, and occasionally even change laws.
Interoperability, or the potential for special structures to paintings collectively, is some other important factor in the increase of digital IDs. As Stapelberg explained, identities are wanted anywhere, and virtual IDs have to work across borders, similar to physical IDs do today. To obtain this, many distinctive companies will want to work collectively to construct answers that work globally.
Google is making sure that its digital ID answers work on a extensive range of devices, from high priced smartphones to more low cost ones. This is crucial to make certain that digital IDs are accessible to all of us, no matter the device they use or their financial scenario.
Stapelberg also expressed excitement about how digital IDs could make things easier in the financial world, especially in processes like customer onboarding, know-your-customer (KYC) checks, and preventing fraud. Digital IDs could speed up these processes by letting users reuse verified IDs stored in their digital wallets, making interactions between users and businesses smoother and more secure.
Looking to the future, the potential for digital wallets is enormous. “Digital wallets started with payments but have become much more than that today,” Stapelberg said. “We’re working on ways to give people a fully digital wallet experience and make these experiences even better.”
