Governments need to rethink how they approach national digital wallets, according to a new World Bank policy note outlining five principles for implementation.
The third in a series, the note emphasizes that a digital wallet is not simply a government smartphone app. Instead, countries should adopt a distributed architecture connecting independent credential issuers, verifiers, wallet providers and trust service providers.
Governments must also prioritize real-world use cases, establish robust trust frameworks and carefully evaluate sourcing models to balance public security, user privacy and financial sustainability.
Among other things, the document calls for designing the ecosystem before procurement to allow the government to map out all component interactions, the responsibilities of actors, legal mandates and trust governance frameworks.
Open international standards should also be adopted early in the wallet rollout process. Vendor-neutral specifications such as W3C Verifiable Credentials, OpenID4VC and ISO 18013-5 can enable cross-border interoperability and prevent technology lock-in.
As an example, the paper points to the European Union Digital Identity (EUDI) Wallet as a case of wallet implementation at national scale, noting that vendors have developed solutions for the 27 EU member states working toward the rollout of the wallets. As national rollout plans advance, though unevenly, the authors suggest these solutions could be adapted to other countries with minimal customization.
The fifth key principle is for governments to avoid large and rigid IT procurement contracts and scope procurements around ecosystem capabilities, policy work, business process re-engineering and continuous iteration.
Rolling out a national digital wallet does not, the note emphasizes, require building assets from scratch. It encourages countries to leverage existing government portals, super-apps or national identity databases while also making use of public key infrastructure for cryptographic signing.
Governments should also consider component-by-component sourcing, evaluating whether to develop individual components internally, outsource them, establish public-private partnerships or rely on regulated market providers.
The World Bank also recommends a phased rollout framework with four development stages. These include discovery, proof of concept or Alpha, pilot or Beta, and production or Live.
Governments should also mitigate the risk of vendor lock-in, ensure inclusion and accessibility, and appoint a product owner within government to coordinate implementation across the public and private sectors.
The note also outlines a technical standards stack covering credential formats, issuance and presentation rules, and offline functionality. It separately examines decentralized privacy protections, financing and monetization, and the role of public funding in supporting sustainable wallet ecosystems.
The latest policy note follows two earlier World Bank publications. The first, Digital Wallets: A New Paradigm, argues for a shift away from monolithic identity systems toward modular, user-centric architectures based on verifiable credentials.
The second, Digital Wallets: Trust Frameworks, examines the governance and trust arrangements needed to support digital wallet ecosystems amid growing identity fraud and cybersecurity risks.
Article Topics
digital wallets | identity infrastructure | interoperability | open standards | World Bank
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