Digital Identity Solutions Market by Hardware (RFID Reader & Encoder, Hardware-Based Tokens, Processor ID Cards), Solution type (Identity Verification, Authentication), Identity Type (Non-Human Identity (NHI), Human Identity) - Global Forecast to 2031

The global digital identity solutions market size is projected to grow from USD 44.20 billion in 2025 to USD 132.14 billion by 2031 at a compound annual growth rate (CAGR) of 20.0% during the forecast period. The increasing integration of artificial intelligence (AI), machine learning (ML), and blockchain technologies is transforming digital identity frameworks by enabling real-time authentication, behavioral analytics, and decentralized identity management. AI-driven liveness detection and behavioral biometrics are helping reduce identity takeover incidents by over 90%, thus enhancing user trust and security.

Simultaneously, the growing adoption of biometric devices, such as fingerprint and facial recognition systems, is strengthening identity verification processes, facilitating secure onboarding, and driving broader digital transformation initiatives across various sectors. However, rising privacy concerns regarding continuous data monitoring, biometric storage, and user-tracking risks are retraining the market growth. The lack of clear regulations for handling sensitive identity data and limited user awareness of consent mechanisms further constrain large-scale deployment.

“By vertical, the retail & eCommerce segment is expected to grow at the highest CAGR during the forecast period”

The retail and eCommerce sector is capturing the fastest growth within the digital identity solutions market because it faces a steep rise in sophisticated fraud and escalating demands for frictionless customer experiences. For instance, online commerce experienced an authorized fraud rate of 1.62% in 2024, more than eighteen times the global average, with fake account creation and identity takeover attacks surging. Meanwhile, more than half of merchants in North America reported year-on-year increases in fraud losses, driving retailers to adopt digital identity verification across checkout and loyalty processes. Simultaneously, consumers expect fast, secure onboarding and one-click payments, prompting retailers to invest in biometric authentication, device fingerprinting, and AI-powered identity verification.

“By deployment, the cloud segment is expected to grow at the highest CAGR during the forecast period”

The global digital identity solutions market’s cloud deployment mode is expanding most rapidly because organizations prioritize agility, cost efficiency, and real-time security. Cloud identity services offer scalable infrastructure on demand, enabling enterprises to manage identities across diverse devices and geographies without incurring heavy upfront investments. According to an article by Avatier, 85% of enterprises experienced improved security efficiency after adopting cloud-based identity and access solutions. Cloud-native identity platforms also accelerate the use of modern authentication protocols such as single sign-on (SSO) and multi-factor authentication (MFA), while seamlessly integrating with multi-cloud and SaaS environments, making them more adaptable than traditional on-premises systems.

“North America will have the largest market share 2025 and Asia Pacific is expected to grow at the fastest rate during the forecast period”

North America is estimated to hold the largest market share in the digital identity solutions market in 2025, driven by a well-established regulatory foundation, consistent federal support, and early adoption of advanced authentication frameworks. Government-led initiatives, including the evolution of NIST standards and legislative priorities such as oversight of the digital identity ecosystem, have strengthened trust, interoperability, and fraud mitigation across public services and critical infrastructure. Enterprises across banking, healthcare, transportation, and retail sectors continue prioritizing identity modernization aligned with zero-trust architectures and privacy-preserving compliance mandates. Additionally, strong cloud penetration, mature cybersecurity expenditure, and coordinated collaboration between technology vendors and public agencies collectively ensure scalable, high-assurance identity environments and secure digital service delivery across institutions and user ecosystems.

Meanwhile, the Asia Pacific is poised to experience the fastest growth, driven by expansive national digital identity mandates, rapidly scaling digital economies, and accelerated public service modernization programs. Countries such as China, Japan, India, and Singapore are advancing biometric authentication, decentralized identity models, and cross-sector interoperability as part of digital sovereignty and security initiatives. This rising momentum is further supported by strong demand for secure mobile-based access, financial inclusion programs, and privacy-centric identity standards across banking, healthcare, travel, and government services. Combined with increased investment in AI-powered verification, blockchain-enabled identity platforms, and large-scale citizen access frameworks, the region is progressing toward highly secure, interoperable identity environments that complement rapid digital expansion and reinforce long-term innovation.

Breakdown of Primaries

The study draws insights from various industry experts, including component suppliers, Tier 1 companies, and OEMs. The break-up of the primaries is as follows:

• By Company Type: Tier 1 – 25%, Tier 2 – 40%, and Tier 3 – 35%
• By Designation: C-Level Executives – 30%, Directors – 35%, Others – 35%
• By Region: North America – 15%, Europe – 25%, Asia Pacific – 30%, Middle East & Africa – 20%, Latin America – 10%

Major vendors in the global digital identity solutions market include Thales (France), NEC (Japan), IDEMIA (France), Samsung SDS (South Korea), TELUS (US), HID Global (US), CrowdStrike (US), DXC Technology (US), IBM (US), CyberArk (US), HCLTech (US), GBG (UK), Ping Identity (US), Tessi (France), ACI Worldwide (US), Jumio (US), OneSpan (US), Duo Security (US), Imprivata (US), Entrust (US), Smartmatic (UK), Signicat (Norway), Shufti (UK), Regula (Latvia), Incode Technologies (US), Persona (US), AU10TIX (Israel), iProov (UK), Vintegris (Spain), Innovatrics (Slovakia), and VerifiNow (US).

The study includes an in-depth competitive analysis of the key players in the digital identity solutions market, their company profiles, recent developments, and key market strategies.

Research Coverage

The report segments the digital identity solutions market and forecasts its size offering (solutions and services), solution type (identity verification, authentication, identity lifecycle management, and audit, compliance, and governance), user type (workforce identity and customer identity), identity type ( non-human identity (NHI) and human identity), organization size (large enterprises and SMEs), deployment mode (on-premises, cloud, and hybrid), and vertical (BFSI, government, healthcare, retail and eCommerce, telecommunications, IT and ITeS, energy and utilities, education, manufacturing, and others).

The study also includes an in-depth competitive analysis of the market's key players, their company profiles, key observations related to product and business offerings, recent developments, and key market strategies.

Key Benefits of Buying the Report

The report will help market leaders/new entrants with information on the closest approximations of revenue numbers for the overall digital identity solutions market and its subsegments. This report will help stakeholders understand the competitive landscape and gain valuable insights to better position their businesses and plan suitable go-to-market strategies. The report also helps stakeholders understand the market pulse and provides information on key market drivers, restraints, challenges, and opportunities.

The report provides insights into the following pointers:

• Analysis of key drivers (expansion of digital transformation and remote; rise in ID wallet solutions; boost in usage of online services offered by commercial businesses in recent years; rise in identity and authentication frauds), restraints (privacy concerns in digital identity solutions adoption; high implementation complexity and integration challenges), opportunities (expansion of digital ID wallets and cross-border identity solutions; increased integration of AI, ML, and blockchain technologies to enhance digital identities; adoption of biometric devices in digital identity solutions; and adoption of advanced authentication techniques across verticals), and challenges (high costs associated with the deployment of digital identity solutions; difficulties in addressing complexities of advanced threats)
• Product Development/Innovation: Detailed insights into upcoming technologies, research & development activities, and new product & service launches in the digital identity solutions market
• Market Development: Comprehensive information about lucrative markets – analysis of the digital identity solutions market across varied regions
• Market Diversification: Exhaustive information about new products & services, untapped geographies, recent developments, and investments in the digital identity solutions market
• Competitive Assessment: In-depth assessment of market shares, growth strategies, and service offerings of leading players in the digital identity solutions market, including Thales (France), NEC (Japan), IDEMIA (France), Samsung SDS (South Korea), and TELUS (US)

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