Is it a fair fight? Industry voices concerns over new government digital wallet

The UK Government’s announcement that UK motorists will be able to use a digital driving licence to prove their age when buying age restricted items is raising concerns about the impact on private sector authentication services.

Richard Oliphant, a legal expert on international digital identity schemes, described the decision as “a surprising government pivot,”

Writing on LinkedIn, he noted that the new GOV.UK Wallet and App will support use cases like buying alcohol, which had been earmarked for the 50+ identity providers that have been certified against the UK DIATF.

“It means that the GOV.UK Wallet will be competing with wallets issued under the UK [Digital Identity & Attributes Trust Framework] DIATF. Is that a fair fight and can the DIATF-certified identity providers capitalise on first mover advantage?” he asked.

“Yesterday, we had a clear boundary between the government’s One Login system for public sector authentication, and the DIATF for private sector authentication (including age assurance). Today that boundary has been blurred. Is it in the best interests of UK citizens, residents and businesses? Only time will tell.”

Another digital identity supplier echoed those concerns. They told Think Digital Partners: “The government is rightly looking to drive growth in the economy. However, the current confusion over government policy on the digital identity infrastructure will deter investment.

“There is enormous value to be created from delivering a trustworthy environment for digital transactions as described by the DIATF for which legislation is currently in Parliament. But this is undermined by the public sector announcing it will create a digital identity credential in its own government issued digital wallet. Why would the private sector try to compete in digital identity? Government policy on digital identity has flipped and flopped for 25 years. Investors will go to markets where there is long term clarity.”

Other suppliers ‘excitement’ over digital wallet

However, Robin Tombs CEO and co-founder of UK DIATF-certified digital identity service provider (IDSP) Yoti, said he is “excited that many millions of citizens will now be able to choose to prove age or ID with either the GOV.UK wallet or an alternative government certified reusable digital ID wallets such as Yoti.

“This follows a similar path to Europe and Australia where citizens will be able to choose to use a government provided reusable digital ID or one of a number of certified reusable digital IDs offered by the private sector.”

Elsewhere, the digital identity vendors welcomes the introduction of a government digital ID wallet for the UK.

Andrew Bud, Founder, and CEO of iProov, said that digital identity is crucial to establishing trust online and research has consistently shown that trust in digital transactions drives economic growth.

“Trusted digital identity wallets, like the one announced today by the Secretary of State, Peter Kyle, are the tool of choice for today’s most advanced public authorities, thanks to their privacy, security and scalability.

“This announcement signposts the UK’s way to the forefront in creating a new critical national infrastructure which will empower citizens and organisations. Strong biometric security at every step in the lifecycle of such wallets is crucial to ensure that only the rightful person can own, fill, and use the wallet in a period of intensifying cyber-attacks from criminal and state adversaries.”

This was echoed by Hippo Digital chief digital officer, Darren Hutton. He noted that at the 2024 Think Digital Identity and Cybersecurity event, Hippo curated a panel bringing the topic of digital wallets to a wider audience, “so it’s great to see this starting to take shape.”

He said: “As seen across Europe with eIDAS 2.0, there are many potential use cases for digital wallets. Here the importance of open standards for interoperability will ensure that users are empowered and see the benefits of wallets. Hippo’s work on NHS England’s Digital Staff Passport, a wallet enabling movement of staff, has shown that users will adopt with a compelling use case. Open standards should ensure that users can utilise credentials in multiple scenarios, which will lead to more compelling reasons and wider adoption.

“Hopefully, off the back of this announcement, DSIT can bring together programmes of work across Government to bring the best outcomes for users.”