The European Digital Identity Wallet (EUDI Wallet) is set to change how payments are authenticated across the EU. It simplifies Strong Customer Authentication (SCA) by tying digital identity directly to payment authorization, making transactions both faster and more secure. For payment service providers (PSPs) and banks, integrating with the EUDI Wallet isn’t optional. It’s a requirement under eIDAS 2.0.
If you're a payment provider, now is the time to prepare. Here’s a step-by-step guide to integrating EUDI Wallet support into your payment system.
The EUDI Wallet acts as a secure authentication tool for users making electronic payments. Instead of using passwords, SMS codes, or app-based approvals, users confirm transactions with biometric authentication or a PIN inside their wallet.
This authentication is cryptographically bound to the transaction details through dynamic linking, ensuring that any modification to the amount or recipient invalidates the authentication. This approach prevents fraud while improving the user experience.
For payment providers, this means that the wallet serves as both an identity verification tool and a secure way to authorize transactions without relying on outdated authentication methods.
To integrate with the EUDI Wallet, PSPs must support OpenID4VP (OpenID for Verifiable Presentations). This protocol allows users to present verifiable credentials (VCs) from their EUDI Wallet to authenticate payments.
This replaces traditional SCA methods while ensuring regulatory compliance and security.
The Attestation to Pay (A2Pay) credential is the core component that enables payments through the EUDI Wallet. It links a user’s payment account to their digital identity, allowing transactions to be authenticated without manually entering account details.
To support A2Pay:
When processing payments, the PSP retrieves the A2Pay credential from the wallet and verifies it before completing the transaction.
Dynamic linking is a required security feature under PSD2 and eIDAS 2.0. It ensures that authentication is bound to specific transaction details, preventing unauthorized modifications.
During a payment authorization:
This prevents fraud by ensuring that no one can modify a payment after it has been authorized.
The EUDI Wallet is not just a security improvement, it is part of a broader regulatory framework. Payment providers must align with both eIDAS 2.0 (for digital identity verification) and PSD2 (for SCA and dynamic linking).
eIDAS 2.0 mandates that payment providers accept the EUDI Wallet for authentication, ensuring that digital identity verification is a fundamental part of the payment process. PSD2 also requires that all electronic payments use Strong Customer Authentication (SCA) with dynamic linking, meaning that each transaction must be securely bound to the recipient and amount, preventing unauthorized modifications.
By integrating the EUDI Wallet, payment providers meet both requirements in a streamlined way.
Integrating with the EUDI Wallet will require updates to your payment infrastructure, particularly your authentication and authorization APIs.
This ensures that payments remain seamless while benefiting from the added security of digital identity authentication.
One of the biggest advantages of the EUDI Wallet is standardized authentication across the EU. Users will be able to authenticate payments the same way whether they are in France, Germany, or Spain. This removes the complexity of managing different authentication methods across borders.
Payment providers should ensure that their integration supports multiple currencies and cross-border regulations, enabling a smoother payment experience for European consumers and businesses.
As payment providers begin supporting the EUDI Wallet, merchant adoption will be key. Businesses need to understand the benefits, including:
Users will also need guidance on how to register their wallet, link their bank accounts, and use their credentials for payments. Clear, simple messaging will help drive adoption.
The transition to the EUDI Wallet is already underway, and compliance deadlines are approaching. Payment providers that integrate early will be well-positioned to handle regulatory requirements while also offering a better experience to their customers.
Security and user experience are no longer trade-offs. The EUDI Wallet provides a way to achieve both, ensuring fast, secure, and fraud-resistant payments across Europe.
Now is the time to start preparing. If your payment system isn’t ready for EUDI Wallet integration, it’s time to make it a priority.
