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Mobile Identity and Digital Wallets Gain Momentum

In 2021, it is estimated that 322 million mobile identities were in circulation globally. By 2027, it will have more than tripled to 1.02 billion, according to the latest worldwide market study by ABI Research.

Two years of global market disruptions have fueled this trend. The COVID-19 pandemic set the acceleration of mobile identity technology's adoption in motion.

By solving issues relating to physical contact in identity applications, the implementation of Mobile IDs aligned with other trends of digitalization from national and regional governments.

Digital Identity Market Development

Such policy strategies are exemplified through the European Commission's aim to improve identities within the electronic Identification, Authentication and Trust Services (eIDAS) revision in 2023.

"This marks a significant leap in mobile identities, where potential programs like the coming 'European Digital Identity Wallet' may inspire and emerge, seeing substantial market growth," said Lucas Stewart, citizen digital identity analyst at ABI Research.

Mobile identities will have an increasing role in citizens' lives in years to come. While Mobile IDs have been around for some time, recent developments in technology and regulation -- including the growing trend of the digital wallet form -- are set to drive the market.

Looking at this software app technology applied in the context of digital payment, we can see the successes and how the smartphone user experience is enhanced by a digital wallet.

According to the ABI assessment, it's time that the identity space follows suit to take advantage of the multitude of benefits a secure, functional mobile identity structure can bring to eCommerce.

Governments benefit from greater efficiency and improved communication channels with citizens. Citizens can thereby more easily use their secure mobile identity and in more applications.

Enterprise authentication and verification processes similarly benefit. Essentially, all facets of society are calling for and will benefit from the changes brought about by Mobile IDs.

Moreover, considering how derived credentials are easily leverageable from existing physical documents, the high level of anticipated growth seems somewhat predictable.

With a small fraction of the world's population holding a mobile identity, but billions of identities existing, implementors should examine the huge emerging opportunities of the Mobile ID market.

Although mobile identity penetration rates currently are low, ongoing implementation and growth are feasible in many countries and regions during a relatively short timeframe.

Outlook for Mobile Identity Applications Growth

"With the prominence of digital transformation across many areas and industries, digital ID only bares more relevance, and mobile forms of identity will only gain further traction with time," Stewart advises.

That said, I believe it will be insightful to see which applications have the largest Mobile ID adoption, and how far they penetrate the traditional physical credential market. For now, all eyes will be on the market advances across Europe.

The European Commission has allocated a €37 million budget to develop Digital ID wallet pilots in early 2023, serving as preparation for the eIDAS deadline in September 2023 that will see full Digital ID wallet implementation across EU member states.

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