Boom in Digital Identity Documents Market Predicted, but Privacy Issues Remain

A new study on digital identity documents and their implementation has predicted that the number of users of such documents globally will exceed 6.5bn by 2026, from the current 4.2bn in 2022.

A digital identity document is a digital representation of a physical identity document. The growth in the use of such digital certificates is expected to grow due to the global COVID-19 pandemic and its impact on how government services have pivoted to the digital realm to keep pace.

Some findings of the study include:

  • Two critical factors promoting the adoption of digital identity document systems in government services are: ease and equality of access. E-governments need to rely on diverse identity data sets to inclusive digital transformation.  
  • Physical digital identity cards that can store data are predicted to be used by over 4bn people globally by 2026, from 2.5bn in 2022, in order to facilitate many digital e-government initiatives. Although such ‘smart’ identity cards have been controversial in some countries due to privacy concerns, they lie at the center of the digital identity system and will need to be backed by robust cybersecurity and governmental oversight.
  • Due to rife e-commerce fraud centered around weaknesses in digital identity protection systems and methods, e-government services need to build trust and offer a variety of different verification scenarios across use cases.

The marketing study by Juniper Research notes that the United States is “significantly lagging behind in digital identity terms” and the country is expected to account for only 7% of global digital identity revenue in 2026. This “lack of national identity schemes and coordinated strategies is a major limiting factor” but there is potential for innovating around decentralized identity schemes and related privacy protection systems to boost the potential for growth in this market.