Is It Time for Digital Travel Credentials to Take Off?

August 2024

Fintech & Payments

Michael Greenwood

Principal Analyst

International travel is a massive industry; over 800 million people travelled internationally in 2023, according to Juniper Research data. Over half (53.2%) travel by air, with land travel being the second most common mode (43%). The number of travellers will continue to grow, driven by the growth of international tourism and business trips in high-growth developing markets, especially China.

Global Number of People Travelling Internationally (m), 2024 vs. 2029

Source: Juniper Research

As in all other industries, international travellers are increasingly demanding a more streamlined and digital service. Air travel in particular is notorious for its slow check-in process, although identity checks at any border can be time-consuming. It is this friction that is driving the move towards DTCs (Digital Travel Credentials).

There are three categories of DTCs:

• Type 1: Type 1 DTCs are eMRTDs (Machine Readable Travel Documents) that are generated by reading the physical travel credential’s chip, with either a smartphone or a self-service kiosk. For Type 1 DTCs, the user must still carry the physical document, with the eMRTD acting as a form of authentication.
• Type 2: Type 2 DTCs are issued by the same authority as a physical passport, signed by the authority, and linked to the physical passport. The DTC is linked to physical devices and can be used independently of the physical document, which acts as a backup to the DTC. It is important to note that the DTC is based on a physical document, which must still be issued first.
• Type 3: Type 3 DTCs are issued and signed by the issuing authority, and stored on devices. The DTC is not linked to a physical component, which means it can be issued to an individual who does not have a physical passport.

These three different varieties of DTCs offer a progression of how DTCs can be introduced, with the need for physical travel credentials phased out over the three types. This is important, as many governments do not want to abandon physical passports at this point in time. This can be largely attributed to security concerns, with the established system being trusted by authorities. In many markets, a section of the population is either opposed to the principle to digital identity documents of any kind, or not technologically proficient. It is important that governments maintain services to these groups, necessitating the maintenance of physical passport services.

As things stand, no country has fully implemented DTCs, although several pilot schemes have been carried out. This includes a trial which ran between August 2023 and March 2024 in Finland, and another carried out from the 29th February to the 31st of March 2024 in the Netherlands. These pilots were considered successful, with the Finnish pilot carrying out 355 successful DTC checks, with the average check taking eight seconds. The pilots, which both used Type 1 DTCs, were used to inform the EU’s regulation of border checks with DTCs.

The positive results of these pilots indicates that the EU will be introducing regulation to allow the implementation of Type 1 DTCs. These will be combined with automated facial recognition technology, to allow DTC users to progress more quickly through airport check-in. These DTCs will be focused on air travel, as passports are not needed to travel through the Schengen Area, and international travel across sea borders is rarer and generally poses less friction.

In the future, DTCs within the EU will be able to be held within a European Identity Wallet, as set out in the eIDAS2 regulation; this will be the ideal place to store a Type 2 or Type 3 DTC. Based on this knowledge, Juniper Research expects the EU to lead the way in the adoption of DTCs over the medium term.

Outside of the EU, there is less concrete movement towards Type 1 DTCs. However, the ICAO (International Civil Aviation Organisation) has been active in promoting standards, defining the categories of Type 1, 2 and 3 DTCs. This work will make it easier for countries to adopt DTCs, as the credentials will operate on the same standards at both ends of the journey. Countries looking to implement DTCs must ensure that they offer a smoother customer experience than the current system provides, to ensure consumer adoption. 

Michael is a Senior Research Analyst at Juniper Research, and primarily conducts research on digital identity and payments markets. His recent reports include Digital Identity, Instant Payments, and B2B Payments.