The European Payments Council has launched SCARLET, a project to create common rules for accepting EU Digital Identity Wallets when customers authenticate to payment services. The initiative will define contractual responsibilities, operating rules and technical requirements for payment service providers and wallet providers.
SCARLET stands for Strong Customer Authentication Acceptance Rulebook and Liability Framework for EUDIW Transactions. The EPC board approved development on September 24. The council is now developing the framework, with an open consultation planned for summer 2027 and publication of the first rulebook targeted for December 2027.
The work addresses the forthcoming obligation under eIDAS 2.0 for payment service providers to accept EU Digital Identity Wallets for strong customer authentication when users choose them. Customers would use wallets to authenticate when accessing a payment account or initiating an electronic payment.
The EPC expects the European market to include at least 3,000 payment service providers and at least 27 wallet providers across the EU and European Economic Area. SCARLET is intended to prevent those participants from developing incompatible approaches to wallet acceptance.
The planned business and contractual framework will identify scheme participants, eligibility requirements, rights and obligations. Separate functional and operational rules will govern how the scheme works. Technical specifications will draw on the European Commission’s Architecture Reference Framework, related TS12 specifications and the work of large-scale pilots.
Version 1.0 will address wallet acceptance under the existing Payment Services Directive, PSD2, and the European Banking Authority’s technical standards for strong customer authentication. The EPC plans a subsequent version 1.1 covering the forthcoming Payment Services Regulation, with the aim of preserving participants’ earlier implementation investments. The council envisages supporting PSR compliance from 2028 or 2029 onward.
The project follows an invitation from the European Commission’s directorates responsible for communications technology and financial services, DG CNECT and DG FISMA. An EPC task force will develop it with the Commission and the European Banking Authority, while a multistakeholder group will involve wallet ecosystem representatives and other industry participants.
After publication, the EPC envisages an implementation period before the scheme takes effect. Participants would use that period for development, testing, onboarding and certification, coordinated with the European Digital Identity Framework’s compliance timetable.
Sources: European Payments Council
–
By the ID Tech Editorial Team
