2026 is shaping up to be a turning point for digital identity.

Regulatory pressure is increasing, new infrastructure is coming online, and long-standing assumptions about how identity works online are starting to break down. As if that weren’t enough, advances in AI are exposing the limits of systems designed for a very different threat model.

Next year, digital identity will stop being a concept and become a requirement.

Here is how we expect the industry to shift.

OCR and liveness verification vendors will have to invest heavily to stay in business

Great ID verification vendors are adding more and more systems to protect themselves from AI fraud. These systems are not only trying harder to determine whether they are seeing a real document or an AI-generated fake; they are also attempting to detect signals such as VPN usage, location anomalies, and other indicators that might suggest a fraudster on the other end of the line.

The problem is that with each additional layer of protection, fault rates increase. For example, an iCloud-protected iPhone connection via Safari can be mistakenly treated as a malicious, VPN-based attack. This happened to me a few weeks ago, and I was only able to complete onboarding to one of the stablecoin neobanks by switching to Chrome.

In 2026, identity verification providers will invest heavily in staying ahead of the regulatory curve (including new ETSI requirements), anticipating the next wave of AI-driven fraud, and refining existing protection layers so they don’t come at the expense of conversion rates.

People will start to understand the benefits of zero-knowledge proofs delivered by eIDs

Age verification regulations will be the biggest adoption driver for eIDs ever seen. We’ve observed a clear correlation between the growth in users of Yoti and OneID.uk and the introduction of the Online Safety Act in the UK.

What’s new this time is how age verification works. Instead of sharing a date of birth or a full identity document, eIDs allow users to prove a single fact (e.g. that they are over 18) without revealing anything else. This is possible thanks to zero-knowledge proofs: cryptographic mechanisms that let someone prove a statement is true without disclosing the underlying data.

Digital IDs will also be used in person to buy age-restricted items like alcohol, tobacco, or energy drinks at the point of sale, revealing nothing more than a simple confirmation:

"Yes, I’m over 18."

EUDI Wallets will launch (with delays)

2026 will be a year of building production-ready, large-scale pilots that are expected to go live by the end of the year. Will all countries be ready?

No.

But most will be. In Q1 and Q2 of 2026, we expect an increasing number of test versions of the wallets to be released. Interoperability testing in Brussels a few weeks ago already showed many wallets working as expected.

In 2026, most wallet providers will focus on the fundamentals: eIDs and payment credentials. Other document types will follow shortly after.

Early-adopting businesses will take that into account by selecting vendors that will help them adopt EUDI. eIDs are just a beginning. 

AI agents & human payments will get a digital identity upgrade

The launch of eIDAS 2.0 and EUDI wallets by the end of 2026 will have a significant impact on payments.

Users will be able to rely on wallet-stored payment credentials, improving conversion rates while reducing online fraud. Instead of today’s unreliable SMS-based verification, payments can move to wallet-based authentication, which is both more secure and more consistent.

We also expect verifiable credentials to be used for AI agent-based transactions. Protocols such as AP2 (Agent Payments Protocol) from Google will be tested in real payment flows and begin moving toward broader adoption.