EPC Launches SCARLET Initiative to Link EU Digital Identity Wallets With Payment Authentication

EPC Launches SCARLET Initiative Linking EU Digital Identity Wallets to Payment Authentication

The European Payments Council has launched an initiative called SCARLET, directed at supporting consistent use of EU Digital Identity Wallets in payment authentication and helping payment service providers meet their obligations under the forthcoming European Digital Identity Framework Regulation, known as eIDAS 2.

The EPC announcement, published on the Council's website, names the initiative explicitly as addressing payment authentication in the context of EUDIW deployment — though the full operational scope, timeline, governance structure and participating institutions have not been confirmed from the rendered source material available at the time of publication. A fuller picture is expected once the EPC announcement body text can be reviewed directly.

The initiative is described as supporting the consistent use of EU Digital Identity Wallets in payment authentication, with PSP compliance with eIDAS 2 obligations cited as the regulatory driver.

What Is Known About SCARLET

Based on verified primary source material, three things can be stated with confidence:

• The EPC has launched an initiative named SCARLET.
• Its stated purpose is to support consistent use of EU Digital Identity Wallets in payment authentication.
• It is connected to PSP compliance obligations arising from eIDAS 2.

Beyond these points, claims about specific deliverables — such as how wallet-based authentication should be validated, how onboarding flows interact with EUDIW-issued attributes, or how interoperability is to be assured across EU member states — are drawn from the EPC's stated initiative framing and attributed editorial interpretation pending confirmed access to the full announcement text. Readers should treat those characterisations accordingly.

The EUDIW Technical Foundations

The EU Digital Identity Wallet has an established technical basis. The European Commission maintains the EUDIW Architecture and Reference Framework, which covers topics including support for electronic payments strong customer authentication using the wallet — as confirmed by the technical specifications index published at eudi.dev. The Commission also publishes formal Technical Specifications for the EUDIW through its Digital Building Blocks infrastructure.

In regulatory terms, analysts note that eIDAS 2 introduces obligations for certain categories of organisations — potentially including financial institutions — that accept electronic identification as part of regulated services. How precisely those obligations apply to PSPs, and what registration or authentication requirements they trigger, is a matter of ongoing regulatory interpretation that the SCARLET initiative appears designed, at least in part, to help address.

Why It Matters for PSPs

The intersection of digital identity infrastructure and payment services raises practical questions for the industry. The EUDIW Architecture and Reference Framework explicitly addresses the use of wallets in the context of strong customer authentication for payments — a domain already governed by existing EU payments regulation. In analytical terms, the co-existence of wallet-based identity flows and existing payment authentication requirements creates a compliance design question that pan-European standardisation efforts such as SCARLET are positioned to help resolve.

The EPC's role as the body responsible for payment scheme standards and rulebooks in the EU gives the SCARLET initiative institutional weight, though the precise mechanism by which it will operate — whether through a new rulebook, a technical standard, a working group output or another instrument — cannot be confirmed from the currently available source material.

Caveats and What Remains Unconfirmed

Several categories of detail reported elsewhere about SCARLET cannot be independently corroborated at this stage:

• Governance structure and participating institutions.
• Specific milestones or delivery timeline.
• Any reference to large-scale pilot programmes or their status.
• Named EPC executives or spokespersons involved in the initiative.

Note: The full body text of the EPC's primary announcement page was not rendered in the research package underpinning this article. The Finextra and FF News secondary source article bodies were similarly unavailable. This article will be updated as fuller source material becomes accessible. Readers requiring complete detail are directed to the EPC's website directly.

Sources: European Payments Council primary announcement; European Commission EUDIW Technical Specifications; eudi.dev EUDIW technical specifications index.