In Europe, the way we pay and prove who we are is undergoing a historic transformation. From the rise of Open Banking and instant payments to the adoption of digital identity wallets under eIDAS 2.0, two worlds that once ran in parallel, payments and identity, are now converging.

This convergence is not just about compliance; it’s about reshaping how millions of Europeans interact with financial services and digital ecosystems every day.

To explore this shift, we spoke with Claire Deprez-Pipon, digital identity leader with years of experience and deep knowledge on the topic. In this interview, we'll explore the complex relationship between payments and digital identity and diving into the challenges as well as opportunities that lie ahead.

Background: The bridge between finance and digital identity

Question 1 (Q1): Claire, you have an extensive background at the intersection of digital identity and finance. Can you share how you first became involved in this space?

Answer (A): My involvement in digital identity emerged progressively as I expanded the scope of my responsibilities within financial services. I initially focused on Open Banking payments, then moved into card payments, and from there into authentication mechanisms to secure transactions. Naturally, this led me to the broader field of digital identity and security. Much like unraveling a thread, each step revealed new layers of complexity and customer needs that required innovative solutions. To deliver a seamless and trusted user experience, it became clear that addressing payments alone was not enough — building robust digital identity frameworks was essential.

The ongoing challenge of security vs. user experience in payments

Q2: You previously worked at Worldline, where you held key leadership roles. What were some of the key challenges and lessons that shaped your approach to digital payments and identity?

A: If I had to summarize the core challenge in one sentence, it’s finding the right equilibrium between security and user experience. On one hand, we must design systems resilient enough to stay ahead of increasingly sophisticated fraud attempts, especially now with AI amplifying attackers’ capabilities. On the other, we have to minimize friction in the customer journey, as excessive authentication hurdles can easily lead to payment abandonment.

“Addressing this security/user experience balance is not a one-off exercise. It requires continuous adaptation to evolving threat landscapes, emerging technologies, and shifting customer expectations, all while ensuring full regulatory compliance.”

In practice, this means navigating a dense and fast-changing regulatory environment with a complex set of frameworks and standards, that covers both payments and digital identity: PSD2/PSD3 and the upcoming PSR, Instant Payments, PCI-DSS, EMVCo 3-D Secure, eIDAS, AML directives, GDPR, and the AI Act, among others.

One of the lasting lessons for me at Worldline is that success in this domain comes from building solutions that don’t just tick the compliance box but instead transform regulation into an enabler of trust and innovation for both businesses and consumers.

Driving the future of Europe's payment with the EUDI Wallet

Q3: Now as part of the European Payments Initiative (EPI), you’re helping reshape Europe’s payment landscape. Can you share with us what your current priorities are, and how digital identity fits into EPI’s broader vision?

A: Joining EPI has been an exciting opportunity to contribute to reshaping the European payments landscape and to bring my expertise in digital identity into this strategic journey. My primary responsibility is to define and drive EPI’s digital identity strategy, ensuring it is fully aligned with both regulatory requirements and long-term innovation goals.

From a compliance standpoint, like all banks and relying parties, EPI will need to support the European Digital Identity Wallet (EUDI Wallet), particularly where Strong Customer Authentication (SCA) is required by Union or national law as well as contractual obligation. However, it’s not enough to simply meet regulatory requirements. EPI must also ensure that the integration of the EUDI Wallet is seamless, so that new authentication flows do not introduce complexity or friction for users.

“Delivering compliance should go hand-in-hand with maintaining an optimal user experience, making secure payments intuitive and effortless for consumers.”

Beyond compliance, our vision for the Wero wallet is closely tied to the objective of strengthening European sovereignty in both payments and digital identity. By deeply integrating payments with the EUDI Wallet, we are not only enhancing user convenience and security but also ensuring that control over sensitive data and critical infrastructure remains within Europe.

This can be done in 2 ways:

• A key driver of this vision is our active participation in the APTITUDE consortium. Through APTITUDE, EPI is exploring how to embed the Wero payment solution directly into the European Digital Identity Wallet, paving the way for secure, seamless payment authentication on a continent-wide scale.

• Looking further ahead, we aim to unlock broader use cases enabled by digital identity in the WERO wallet: from sharing verified attributes during payment transactions (such as age verification) to integrating verifiable credentials like identity document, boarding passes, event tickets, and beyond. 

This convergence of payments and identity has the potential to transform the way Europeans interact with both financial services and everyday digital ecosystems, reinforcing Europe’s strategic autonomy in the digital era.

Financial services and ID verification: Navigating regulations, fraud, and fragmented standards

Q4: Digital identity is emerging as a game changer in banking. From your perspective, what are the biggest challenges fintechs encounter when it comes to verifying customer identities, especially in cross-border transactions and regulatory compliance?

A: Finance companies today face several pressing challenges in verifying customer identity, especially when operating across borders and under varied regulatory landscapes:

• Rising Fraud and Identity Risks: Fraud in financial services continues to surge, with a 21% increase in fraudulent activity between 2024 and 2025. Currently, 1 in every 20 verification attempts is fraudulent, and enterprise banks have reported the highest growth in fraud incidents. Some institutions note losing up to 20% of annual revenue due to fraud, much of it tied to increasingly sophisticated scams like deepfakes, synthetic identity fraud, and account takeovers (Source: Veriff, "Top fraud trends in digital banking for 2025").

• Diverse Regulations and Local Laws: Identity verification processes are complicated by the need to comply with a multitude of local regulations, legal frameworks, and technical standards. For instance, the European Union has the overarching eIDAS framework, but individual member states maintain their own electronic ID schemes, rules on valid documents, and compliance protocols. This patchwork means that what suffices for compliance in one country (e.g., a type of ID card or remote video verification) might not be accepted in another, creating a maze for fintechs to navigate.

• AML Requirements and Data Collection: To comply with Anti-Money Laundering (AML) directives, fintechs must collect and verify a broad array of customer information (Full legal name, Date and place of birth, Nationality, Residential address, Government-issued identification number, Proof of ownership for bank accounts , Source of funds and wealth information, Politically Exposed Person status, Screening against sanctions and watchlists, …).

• Cost and Complexity of Verification: The expense of digital identity verification can be considerable, especially when it involves manual reviews or face-to-face video checks with human operators. Automated digital verification of identity documents can range from $0.10 to $1.50 per check, while biometric liveness checks cost $0.25 to $2.00 per session. Comprehensive onboarding — bundling KYC, biometric, and AML checks — adds to the cost, with further expenses in high-risk regions or for complex document types.

• Fragmented Technology and Documentation Standards: With dozens of different ID formats and a lack of standardized verification APIs worldwide, fintechs must implement multiple, market-specific integrations. Language barriers, discrepancies in ID document formats, and inconsistent acceptance of digital credentials further complicate global customer onboarding.

“In summary, financial companies must navigate soaring fraud rates, mounting regulatory complexity, significant operational costs, and fragmented international systems, all while maintaining a seamless customer experience and strict regulatory compliance.”

The impacts of the EUDI Wallet on the financial industry

Q5: You mentioned before that the entire financial industry will need to support the upcoming EUDI Wallet. In your view, how will it overall impact banks and financial institutions?

A: The EUDI-Wallet is set to reshape banking and financial services in profound ways over the coming years. The most significant impacts include:

• Seamless Onboarding and KYC: Digital identity technologies will enable instant, remote verification that fulfills regulatory requirements, dramatically reducing manual work and paperwork. This acceleration of KYC procedures will allow banks to efficiently acquire and onboard clients, particularly in digital-only channels, but also to reduce administrative costs of manual document review.

• Superior Compliance & AML Efficiency: EUDI-Wallets support direct, regulator-approved identity verification, simplifying compliance with Anti-Money Laundering (AML) and other regulatory requirements. Selective data disclosure lets banks collect only the minimum necessary data, reducing privacy risks and cost. The unified legal framework provided by eIDAS 2.0 and the EUDI-Wallet standard also lowers the complexity of compliance for banks operating across the EU.

• New Product Innovations & Opportunities: Banks can leverage EUDI-Wallet integration for hyper-personalized services, instant loan approvals, automated contract execution, and secure sharing of verifiable credentials (such as proof of age or IBAN ownership). This opens the door to a broad range of new value-added digital services and business models.

• Improved Cross-Border Usability and market expansion: Customers can use the EUDI-Wallet to interact with financial services from anywhere in the EU, boosting financial inclusiveness while reducing onboarding drop-off rates.

• Mandatory Adoption & Competitive Necessity: Banks and other regulated financial institutions will be required to accept the EUDI-Wallet by December 2027 for high-value and regulated services. Early adopters will gain a competitive edge by providing faster, more secure, and compliant digital access to financial products.

Q6: What do you feel is still missing in the EUDI Wallet specs to make it truly viable for widespread adoption in finance?

A: Several critical elements remain missing or underdeveloped in the current EUDI Wallet specification, particularly when viewed through the lens of widespread adoption in finance and payments:

• Interoperability between eIDAS and PSD2: A major challenge is aligning the EUDI Wallet’s framework (driven by eIDAS 2.0) with existing financial regulations like PSD2. The lack of standardized protocols and technical interfaces for strong customer authentication (SCA), payment initiation, and consent management creates headache for banks and fintechs who must ensure both compliance and seamless user experience. True interoperability between digital identity credentials (eIDAS) and payment authorization requirements (PSD2) is essential to realize the full potential of digital identity in transactions.

• Clear Liability Framework: Current specifications leave ambiguity regarding liability and risk distribution when identity, authentication, and payments intersect. Financial actors need precise definitions of who is responsible in case of fraud, data breaches, or transactional disputes involving EUDI Wallets.

Recent analysis by the Dutch Payment Association points out that the EUDI Wallet is designed for two-factor authentication in payments, but this does not fully meet the stricter SCA rules under PSD2, which require extra security steps like risk checks and transaction linking.

“Widespread viability will depend on greater clarity, coordinated standards, and practical guidance from legislators. Only through deeper alignment between eIDAS and PSD2 requirements — and direct involvement of financial sector stakeholders — can the EUDI Wallet become a truly secure and interoperable solution for European payments.”

IT and organizational changes banks must make to be ready for the EUDI Wallet

Q7: What kind of organizational or infrastructure changes should banks and financial institutions prepare for as EUDI-Wallets gain traction?

A: Banks must update their IT systems to support EUDI Wallets for authentication, onboarding, and payment flows. This involves reengineering — sometimes over 100 — APIs and interfaces to accept digital identity credentials according to eIDAS 2.0 standards, as well as ensuring interoperability with legacy KYC and PSD2 processes. At the same time, banks must offer alternative onboarding and authentication methods for customers who don’t use the EUDI Wallet, since even with an EU target of 80% adoption by 2030, some citizens will still need traditional options.

It’s equally important to train frontline staff and compliance teams on the use and benefits of EUDI Wallets, and to update procedures for onboarding, authentication, and dispute resolution. Currently, there is a gap: some customers are already asking to use digital identity via their smartphones, but many branch employees and advisers are not yet prepared to support these new processes.

Bridging this gap requires solutions that ease integration with existing infrastructures while supporting future EUDI Wallet standards. With Hopae Connect, we help institutions adapt without disrupting customer journeys.

How to choose the right intermediary partner for ID verification in the EUDI Wallet era

Q8: So, when financial service providers start to review their identity verification processes, what should they prioritize when choosing an intermediary?

A: When financial service providers review or modernize their KYC processes, it’s crucial to prioritize identity verification partners that offer:

• Pan-European Consistency: Select partners whose solutions can verify identities reliably and compliantly across all European countries, no matter the local regulatory requirements or national ID formats. This ensures smooth onboarding, even as each market maintains its own standards for digital identity.

• Unified Hub Approach: Look for platforms that offer a single integration hub connecting multiple European eID systems and EUDI Wallets. This centralization simplifies back-end integration, reduces technical complexity, and makes it easier to scale services internationally.

• Flexible, Powerful Workflows: Choose providers that enable you to build and administer advanced workflows for onboarding, KYC, AML, and customer authentication. Ideally, these platforms should support selective data disclosure, automated documentation management, and easy updates to respond to changing business needs and regulatory requirements.

• RegTech Capabilities: Prioritize partners with strong RegTech features — especially automated compliance engines. These engines continuously adapt onboarding and KYC processes to the latest AML, CDD, and KYC regulations (including the incoming AMLR). Automation reduces manual checks, accelerates onboarding, and helps avoid compliance pitfalls as regulations evolve across Europe.

• Scalability and Future-Proofing: Given the EU’s push toward EUDI Wallet adoption and rapidly evolving rules, providers should be ready to expand coverage to new eID systems, support innovations like NFC-based identity verification, and provide ongoing compliance updates. This ensures your organization remains agile as digital identity standards advance.

Want to ensure your ID verification processes are fully compliant today while preparing for eIDAS 2?

Learn how intermediaries bridge current regulations with upcoming ones.

Financial sector and digital identity: emerging trends

Payments and identity are converging in 2025

Q9: We talked a lot about the past and the present so far. As we’re now halfway through 2025, what is one trend in digital identity that you see emerging?

A: One of the most prominent trends emerging in digital identity during 2025 is the convergence of payment and identity. At every major industry event, this topic stands out: payment wallets are seeking to embed identity features, while identity wallets and apps aim to incorporate payment functions. This integration is now a daily focus because payments are a high-frequency, high-impact use case for consumers.

The approaches range from sharing identity data, such as verified credentials, during payment transactions, to full-scale convergence, where payment wallets adopt EUDI Wallet functionality and EUDI Wallets become recognized payment methods. However, this evolution remains challenging; the payment ecosystem is highly complex, with robust and established rails. Success will depend on leveraging these existing infrastructures for seamless integration rather than attempting to build entirely new systems from scratch.

How to make digital ID a success in finance: Collaboration and trust must be the foundations

Q10: Looking even further ahead, if you imagine the state of digital identity in Europe five years from now, what would “success” look like to you?

A: Looking five years ahead, over 80% of Europeans use digital identity wallets for daily life. Opening a new bank account or investing with a cross-border financial provider takes just a few seconds and a tap on your mobile wallet. When checking into a hotel abroad, you simply scan your EUDI Wallet, no passports, just instant, secure trust. Age-restricted purchases, digital signatures, and even providing proof of residence or income for a rental application happen instantly, all while you remain in complete control of what data you share.

But true success for digital identity in Europe will mean high volume adoption and significant growth, even in countries already considered mature in the space. We’ll see models like itsme in Belgium, BankID in Sweden, and mojeID in Poland replicated across Europe, underpinned by deep trust from banks and real use cases in payments that drive everyday engagement.

“Success will require a robust ecosystem built on active collaboration between all stakeholders: financial institutions, governments, technology providers, and crucially, attribute providers who enable new services and value for citizens and businesses. Digital identity must deliver tangible benefits, such as speed, security, and convenience, for both individuals and companies.”

Importantly, achieving this vision means embracing and integrating alternative digital identity systems that already have traction, rather than insisting on a single, state-owned solution. For example, in Germany, success will come from supporting whichever wallet citizens actually choose to use, whether public or private, and fostering meaningful public-private partnerships.

“The future of digital identity in Europe is not just about technology. It’s about trust, flexibility, and a thriving, collaborative ecosystem that creates daily value for everyone.”

Turning possibility into reality

The future of payments and digital identity in Europe will depend on trust, seamless experiences and collaboration across industries. From compliance with new regulations to unlocking innovative services through digital identity wallets, the coming years will redefine how banks, fintechs and consumers interact.

At Hopae, we help Financial Services navigate this shift with solutions that make digital identity seamless, compliant, and user-friendly.

Ready to see what this could look like for your organization?
Request a demo today.