Digital identity wallets are gaining serious traction.

Driven by the EU Digital Identity (EUDI) initiative and government-led wallet projects around the world, 2026 will be the year these apps begin to go mainstream. According to Gartner, more than 500 million people will have access to a digital identity wallet by 2026.

But what do identity wallets mean for authentication?

At their core, wallets are shifting identity verification from a one-time KYC event to a reusable, ongoing proof of identity. In practice, that could mean:

This is a major shift. Today, onboarding and recovery are still painful. Users struggle with long ID checks or wait for SMS OTPs that never arrive. Identity wallets streamline the process, but only if they’re trusted.

Trust will hinge on three things:

This is where biometrics come in. But again, not all biometrics are created equal.

To unlock the full potential of digital identity wallets, biometric authentication must be:

Don’t miss our full analysis in The State of Authentication 2026, launching this October. The State of Authentication 2026 report will cover the five key forces reshaping authentication in the year ahead.