As a response, the Global South is increasing its efforts to create and deploy Digital Public Infrastructure (DPI). This increased focus will improve service delivery, increase financial inclusion, and create economic opportunity. As these countries begin their own journeys towards digital transformation, there is much that can be learned. The European Union’s experience with their European Digital Identity (EUDI) wallet initiatives provides critical lessons to learn from. By examining the EU's Large-Scale Pilots (LSPs) and adaptable business models, the Global South can accelerate the development of robust and citizen-centric DPI.

Understanding the EUDI Wallet and Its Core Principles

As you may recall from our previous post, the European Digital Identity (EUDI) wallet is a center piece of the EU’s digital strategy. It provides citizens a safer, easier way to take control of their digital identities. A few key principles drive the design of the EUDI wallet, and they provide important lessons for DPI-building in the Global South.

  • User-centricity: The EUDI wallet is designed with the user in mind, giving citizens control over their data. Users can decide which aspects of their identity to share with third parties, enhancing autonomy and trust.
  • Interoperability: The EUDI wallet aims to work seamlessly across all EU member states. This interoperability is critical for enabling cross-border transactions and services, a model that can be adapted for regional cooperation in the Global South.
  • Privacy by Design: Data protection and user privacy are paramount. The EUDI wallet is designed to protect user data and ensure privacy, addressing concerns about surveillance and misuse of personal information.
  • Security by Design: The EUDI wallet incorporates the highest European data protection and cybersecurity standards. This robust security framework is essential for maintaining trust and preventing fraud in digital identity systems.
  • Digital Wallet Functionality: The EUDI wallet allows citizens to securely store, share, and sign important digital documents, such as educational credentials, medical records, and financial information. This versatility makes it adaptable for various sectors in the Global South.

Key Learnings from EU Large-Scale Pilots (LSPs)

The EU's Large-Scale Pilots (LSPs) have been instrumental in testing and validating the EUDI wallet's functionality and interoperability. These pilots provide important insights for the Global South.

Further, the LSPs—through their work on digital solutions, including the EUDI Wallet—have made sure that solutions are in line with European expectations, especially with regards to eIDAS 2.0. This regulation lays down rules concerning the management of digital identities and the protection of personal data, offering a guiding framework for secure, interoperable and trustworthy digital interactions. The Global South has much to learn from these standards as a foundation to build their own regulatory frameworks.

The LSPs enrolled a notably wide variety of participants. This counts 350 private companies and public authorities coming from 26 out of the 27 EU member states, plus Norway, Iceland and Ukraine. However, this massive participation has helped to prove the feasibility, interoperability, and security of digital solutions across various states and localities. There is much the Global South can gain from these cooperative methods.

The LSPs have been through the gauntlet of testing and validating digital solutions. Most importantly, they made sure these solutions could be deployed easily and securely across all 27 EU member states. This testing period, which is critical to any new innovation, is key to spotting and correcting unintended consequences before a national rollout jeopardizes lives.

The EUDI Wallet is at the heart of all the LSP pilots. It establishes a safe and interoperable digital environment for all European citizens and businesses. Its success will depend on whether it presents a secure, user-friendly and trustworthy digital identity solution.

Adaptable Business Models for DPI in the Global South

Many business models have evolved in the digital identity space, providing flexible solutions where DPI could seed fertile ground in the Global South.

  • Pay-per-verification model: In this model, payment is made for each verification, with costs decreasing as the volume of verifications increases. For example, a fintech application might pay $1 per verification, decreasing to $0.90 per verification if 24,000 users are verified annually.
  • Subscription-based model: This model involves paying a recurring fee (monthly or annual) to access up-to-date identity information. For example, a fintech application may pay $0.50 per user per year to ensure access to current information.
  • Reusable ID model: This approach verifies a user's identity once and allows them to share their verified ID multiple times. The identity company does not generate revenue from subsequent shares.
  • One-click verification model: This model charges a premium for a seamless onboarding experience. The cost of verification may be higher due to the convenience offered.
  • Tokenization model: This model digitizes ownership of assets and is projected to grow significantly, offering opportunities for asset management via wallets. By 2028, the tokenization model is expected to reach to $8.6 billion.

Addressing Challenges and Ensuring Inclusivity

The benefits of having digital identity systems are plentiful. We need to address their shortcomings and push for inclusivity, especially in the Global South.

Exclusion is a significant risk. In Uganda, a pregnant woman was denied medical care due to the lack of a Digital ID (Ndaga Muntu card), highlighting the potential for exclusion from essential services. DPI initiatives must ensure equitable access.

With mass digital identification comes the potential for even more abusive data collection and uses. Without strong safeguards implemented, it poses grave dangers to privacy and undermines data protection rights. Developing strong regulatory frameworks to prevent misuse must be an essential part.

These digital ID systems are often motivated by powerful financial and private interests from the design, deployment, implementation and governance of these systems. Sadly, this happens often, and with little public input allowed. Public participation, done right, provides the transparency and process that builds trust and accountability.

Making digital ID systems centralized databases to know everything about a person is dangerous. Providing access to timely and actionable information is key to empowering participation and informing oversight and accountability.

Strategies for Successful DPI Implementation

To foster effective DPI rollout in the Global South, here are some strategies to keep in mind.

Integrating Civil Registration (CR) and ID systems can reduce the need for expensive, ad-hoc mass registration drives to update data. By taking a holistic approach, we can improve data accuracy and efficiency.

Estonia has created a fully decentralized digital ID infrastructure powered by the blockchain. Such a system provides a safe, verifiable manner of handling citizen data, increasing trust and interaction with the citizenry. Decentralized systems can enhance security and transparency.

By learning from the EU's EUDI wallet initiatives and adopting adaptable business models, the Global South can accelerate the development of robust and citizen-centric DPI. In order to realize the promise of digital identity systems, we need to address gaps in inclusion, data protection, and governance. In this way, we can do a better job of advancing sustainable development.