6 Business Benefits of Verifiable Credentials
Today’s businesses must work extra hard to earn their customers’ trust.
As more interactions take place online, companies have to juggle the competing pressures of verifying who someone is while keeping friction to a minimum.
With rising fraud risks, stricter regulations, and growing demands for data privacy, this isn’t always an easy feat.
The answer? Verifiable credentials.
Let’s look at how verifiable credentials work and why they might make good sense for your business.
What are verifiable credentials?
Put simply, verifiable credentials (VCs) are digital credentials that can be securely verified.
They’re digital equivalents of a passport, a driver’s license, a university diploma, or any other paper document you can think of.
Verifiable credentials are issued by trusted authorities (issuers) to individuals (holders), who can then present these VCs to a third party (verifier) to prove some fact about themselves.
Holders keep VCs in a secure digital wallet (typically on their smartphone). VCs are built on open standards (see W3C Verifiable Credentials Data Model) and work across all compliant wallets and verifiers.
What makes verifiable credentials special is that holders can selectively share only the required information without revealing other details. This makes them one of the better options for preserving privacy.
Want to learn more about VCs?
Check out “Verifiable Credentials: A Glossary (For Everyone)”
Why do we need verifiable credentials?
Legacy methods for identity verification, like passwords and one-off document checks, are becoming increasingly outdated.
There’s a growing need for identity verification that’s secure, privacy-focused, and future-proof. Verifiable credentials are the perfect response to a whole cocktail of overlapping developments.
- Rise in fraud: As we’ve previously shown, cyberattacks and fraud schemes are a growing problem. Fraud is costing more and is harder to ignore. We need more sophisticated identity checks that mitigate this threat.
- Privacy expectations: Thanks to growing awareness and regulations like GDPR, privacy is no longer an afterthought. Today’s customers expect to have their privacy protected both offline and online.
- Regulatory pressures: Under eIDAS 2.0, all EU member states will have to support EU Digital Identity Wallets by 2026, so verifiable credentials will soon become widespread.
- Pan-European compatibility: Businesses operating in multiple European countries will increasingly want to rely on interoperable solutions. Having a country-by-country setup just isn’t sustainable.
- Maturing open standards: Frameworks like OpenID for Verifiable Credentials and ISO 18013-7 define a technology stack, making it much easier to implement VCs.
- Demand for better UX: Customers want an intuitive and consistent way to authenticate themselves across platforms and apps, with as little friction as possible.
Luckily, verifiable credentials offer a potential answer to all of the above.
Where can you use verifiable credentials?
In short, pretty much anywhere you need to verify who someone is or what they can access: age verification, identity checks, qualifications, legal permissions, etc.
For instance:
- Banking & finance: Perform KYC checks easily without relying on paper documents.
- E-commerce: Verify customers’ age for age-restricted products without compromising their privacy.
- Education: Provide digital diplomas and certifications that work across institutions.
- Healthcare: Securely share patient records and prescriptions.
- Travel & hospitality: Check identity for boarding, hotel check-in, loyalty programs, and so on.
We cover more use cases and real-world examples in our standalone deep dive:
Learn more about VC use cases >
What are the benefits of verifiable credentials?
But VCs aren't just externally-imposed technical standards you should begrudgingly accept.
If done right, they can bring about measurable business advantages.
1. Simpler onboarding & higher conversion rates
This part isn’t rocket science: The easier you make it for users to sign up, the more likely they are to complete the process.
Verifiable credentials let users share pre-vetted information with a single tap. No more long application forms or manual document uploads. All of this makes onboarding faster, leading to fewer drop-offs and higher conversion rates.
2. Lower operating costs
Traditional identity checks often call for expensive third-party verification or manual reviews.
VCs replace this by enabling instant, automated verification. This cuts costs, especially for recurring checks like KYC, AML, age verification, etc., while also giving your support team some breathing room.
3. Future-proof setup
Regulations like eIDAS 2.0 will introduce major changes in the form of digital identity wallets and the corresponding use of verifiable credentials. By adopting VCs early on, your business can stay ahead of the curve with a future-proof, convenient, and end-user-focused solution. And, in the event of any new VC-related regulations, you’ll be compliant from day one.
4. Better security & fraud prevention
Verifiable credentials are cryptographically signed by trusted issuers and designed with security in mind. They cannot be faked or tampered with.
This helps dramatically reduce fraud and other forms of identity abuse, making your systems more secure.
5. Privacy & trust
Verifiable credentials let users be selective about which information to disclose, sharing only the required details and nothing more.
This helps you build trust with customers by keeping them in control of their sensitive data. (As a bonus, you’ll also comply with GDPR and other related regulations.)
6. Interoperability & scalability
Verifiable credentials are built on an open standard and meant to work across all compliant platforms, devices, and geographical markets.
Granted, this requires all participants in an ecosystem to first agree on shared rules, such as which tech to use and which issuers to trust.
But once that’s in place, VCs can simplify how you handle multiple identity flows and help you scale your operations to new markets and setups in the future.
The near-term outlook for verifiable credentials: Where are we heading?
VCs are not a matter of if but when.
Regulatory pressures and converging technical standards mean that VCs are set to soon become the norm.
Here’s what we can expect in the near future:
- Widespread adoption in the EU: All EU states must offer VC-compatible wallets by 2026 (under eIDAS 2.0). The EU Commission also set out an explicit milestone that 80% of citizens should be using a compatible eID solution by 2030.
- Maturing global standards: OpenID for Verifiable Credentials and SO 18013-7 are on track to become the backbone of the VC ecosystem, making consistent implementation much easier.
- Real-world rollouts: The EU is already running four large pilot projects for its EU Digital Identity Wallet. This pushes verifiable credentials out of abstract territory and proves that they can function at scale in the real world. Similar initiatives are bound to follow suit.
Together, these developments mean that businesses should start taking verifiable credentials seriously. It’s not a bad idea to consider how your company can prepare for their inevitable arrival.
Your “Verifiable Credentials” preparation checklist
Granted, verifiable credentials aren’t something you can implement overnight.
But there are a few early steps you can take to prepare your business for what’s coming:
- Get familiar with the landscape: Read up on the basics of VCs and relevant standards like eIDAS 2.0 and OpenID4VC. You don’t have to become an expert, but it helps to keep your finger on the pulse.
- Map out your current identity flow: When and how do you collect and verify identity data from your users?
- Identify a candidate for a pilot: Is there a specific area (e.g. age verification) where you can test VC implementation without disrupting the rest of your operations?
- Evaluate vendors and frameworks: Research available VC providers and applicable frameworks to see which ones are compatible with the way you do business.
- Define your success criteria: How will you measure the impact of a potential VC pilot? Is it a faster onboarding flow? Higher sign-up rate? Reduction in fraud attempts?
- Get the ball rolling: Following the above steps, run a small-scale trial to get hands-on experience with VCs and their effects on your business. This could be something like our ID Wallet beta project.
By starting your verifiable credentials journey already today, you’re likely to stay ahead of the curve.
Want to learn (a lot) more about verifiable credentials? Join us at Criipto Connect 2025!
Our upcoming Criipto Connect conference in Copenhagen is all about verifiable information and its impacts.
So join us on Thursday, November 13, 2025.
Spend a day with fellow leaders, innovators, and decision-makers to discover what’s next in the evolution of digital identity.
