cardless e-⁠Residency would significantly increase the number of companies created by e-⁠residents

The Estonian e-Residency programme hosted a panel on the future of electronic identities at Latitude59, Estonia's largest conference dedicated to technology, entrepreneurship, and innovation. The panel "Beyond the Plastic: What Will the Future of Electronic Identities Mean For Businesses?" analysed both the opportunities and challenges of the developments for both the public and private sectors.

In addition to Liina Vahtras, the CEO of the e-⁠Residency programme, which has been issuing electronic identities to foreigners for nearly 10 years, the discussion included Madis Ehastu, a national expert seconded to the European Commission, and Adrian Field, the Development Director of the UK company One-ID. João Rei, a Portuguese entrepreneur residing in Estonia and co-founder of eID Easy, a company developing digital signature applications, moderated the panel.

Just days before the panel, an amendment to the European Union's eIDAS regulation, which deals with electronic identification and trust services for electronic transactions, came into effect. Within a few years, this amendment will create digital wallets for cross-border identification, digital signatures, and digital service consumption in member states.

“Although the eIDAS regulation has aimed to streamline the consumption of digital services in the EU since 2014, times have significantly changed since then. As a result, the European Commission has focused on introducing digital wallets in eIDAS 2.0. Additionally, the COVID-19 pandemic has sharply highlighted the need for secure identity verification solutions. Several member states, such as Poland and Portugal, have already taken steps to develop their digital wallets, and their national apps are very popular. The market for electronic identity solutions is growing and offers exciting new opportunities for entrepreneurs," said Madis Ehastu, who is also the product owner of the European digital identity wallet's technical specification.

According to Ehastu, Estonia is one of the member states with the highest expertise in electronic identity, cryptography, and cybersecurity and is an active participant in developing digital wallets.

Liina Vahtras, the CEO of e-Residency, stated that introducing digital wallets is a very welcome development, as finding a fully digital alternative to the physical e-ID card is the main development goal of the programme. "The digital wallet promises to potentially solve one of the programme's main obstacles: an e-resident would be able to establish their Estonian company significantly faster. Cardless e-Residency would help reduce the programme's waiting time, from application submission to starting business activities, from two months to two weeks. If we could shorten the customer journey, the number of companies created by e-residents could increase by up to 25%," said Vahtras.

"The main goal of e-Residency is to expand the Estonian economic environment. In the digital wallet age, the service ecosystem quality around e-Residency, developed over nearly ten years, will grow even more important. This will ensure that we continue to offer the best business environment experience and enhance its competitiveness both in the EU and globally," she added.

Today, an e-⁠resident must wait for their physical e-⁠Residency card to arrive at a pick-up point. In the future, once they have passed the background check and been assigned an Estonian personal code, they could immediately go to a suitable Estonian embassy, provide their biometrics, and activate their e-ID certificates via a mobile app on-site, without the need to wait for the card to arrive. Vahtras noted that, like Estonians, many e-⁠residents already prefer to digitally sign their documents using mobile applications, activated via the physical card.

In addition to the cardless option, e-⁠Residency aims for a fully digital customer journey using remote verification, including capturing e-⁠residents' biometric data with a smart device, which would make the programme even more secure. A corresponding pilot project is planned in cooperation with SMIT in 2025 and will initially include renewing certificates for existing e-⁠residents' certificates, valid for five years.