Phone wallets will soon hold your ID and cards. Payments must ask for less

Your phone wallet is about to hold more than your cards. By the end of 2026, EU member states must offer citizens and residents at least one European Digital Identity Wallet. Apple and Google already let people add a digital ID next to their payment cards and boarding passes. That raises a plain question for checkout: how much of who you are should a payment need to see?

What changed

An online purchase used to have three separate steps. You identified yourself, usually by logging in. You proved it with a password or a code. Then the card approved the payment.

Wallets fold these into one action on the screen. Behind it, the checks still run in order. The card is tied to your device, your face or fingerprint unlocks the device, and a digital ID can add more proof of who you are.

Less data, same proof

The writer, Alpesh Patel of fintech firm Cartex, argues that payment systems should see as little personal data as possible. A payment usually needs to know the card is valid and the purchase was properly approved. It does not need a birth date or passport number.

The EU wallet is built for this. It uses selective disclosure, so a shopper can prove they are over 18 with a yes or no, and the merchant never sees a birth date. Patel also notes that a breach in financial services costs 26% more than in other industries, so data a company never collects is data it cannot lose.

Who pays when fraud gets through

The article says payment fraud in the EU grew 20% in a single year. New rules the EU agreed this year put more of the loss on providers. They would face wider duties to refund customers tricked by fraudsters who pose as their payment provider.

Providers must also watch transactions more closely, even when the customer approved the payment. In practice, a check that phishing can get around no longer protects the provider from the loss.

Who it affects

• Shoppers: faster checks, and fewer personal details handed over.
• Online sellers: they will likely favor partners that handle every check through one connection.
• Payment providers: cheap, weak checkouts may cost more later in refunds.

What happens next

Patel says providers should use the next two years to prepare for the wallets and the new payment rules. He points to tokenization (swapping card numbers for safe stand-ins), passkeys (logins without passwords) and risk-based checks. This is one executive's view, and the article does not give exact dates for the payment rules or say how the changes would reach shoppers outside the EU.