The European Payments Council (EPC) has greenlit work on a standardisation framework designed to support the consistent acceptance of EU Digital Identity Wallets by payment service providers.
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The EU Digital Identity Wallets are intended to allow people across the European Union to identify themselves and provide verified information. Among their uses will be as an authentication method when accessing a payment account or initiating an electronic payment.
To help smooth the process and reduce the risk of multiple, potentially non-interoperable approaches emerging, the EPC has approved the development of Scarlet (Strong Customer Authentication Acceptance Rulebook and Liability Framework for EUDIW Transactions), providing a common standard for the more than 3000 PSPs and the 27+ EU Digital Identity Wallet providers expected to operate in the EU/EEA.
The EPC says it plans to develop a business and contractual framework defining scheme actors, eligibility requirements, rights and obligations of the legal entities participating to the scheme. It will also set out common functional and operational rules as well as technical specifications, relying on the work already done by the EC with the Architectural Reference Framework, the related technical specifications, and considering the contribution of pilots.
Version 1.0, will focus on the acceptance of EU Digital Identity Wallets by PSPs under PSD2. A version 1.1 will extend the framework to the forthcoming Payment Services Regulation.
Giorgio Andreoli, director general, EPC, says: “EU Digital Identity Wallets will provide to European end-users an alternative way to safely and conveniently authenticate when accessing payment accounts and using payment services. As set out by the European Digital Identity Framework Regulation, wallets and payment services providers must be able to interact consistently across Europe, and this will be a challenge due to the sheer number of these actors.
"Through Scarlet, the EPC aims to bring market participants and public authorities together around a common set of contractual, business and technical interoperability rules, with a clear allocation of responsibility. Our objective is to support innovation while avoiding fragmented implementations that would add complexity and costs for payment service providers, wallet providers and European citizens.”