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Competing visions of digital wallets as super apps or online identity hubs presented

CB Insights webinar and Thales survey illustrate two possible directions
Competing visions of digital wallets as super apps or online identity hubs presented

The convergence of different capabilities and services in digital wallets was explored in ‘The Future of the Wallet’ webinar hosted Tuesday by CB Insights, just as Thales releases survey results on consumer response to the EU Digital ID Wallet. Considered side-by-side, the two snapshots seem to indicate a regional difference, but also a major opportunity for digital ID and biometric software providers.

CB Insights Senior Intelligence Analyst for Fintech Elif Yayla noted the replacement of single-function wallets with ‘super-wallets,’ and reviewed the market’s growth.

She noted that wallets “strive to become the go-to app for all things money-management” by combining storage of payments, bank accounts, insurance, and authentication information like biometrics, among key trends in the space. This is converging with other, familiar trends around digitization and remote mobile access, to drive digital wallets forward.

CB Insights stats suggest that digital wallets are already a $1.5 trillion dollar market, and will reach $7.6 trillion by 2027.

The space is increasingly crowded, but without a dominant player thus far, according to Yayla, despite the efforts of tech giants. Fintechs have converged on the digital wallet space, and wearable device providers are angling in.

Examples of super-apps are found in China’s Alipay and WeChat, and Yayla says PayPal has made the most progress towards emulating their model in the West. PayPal has expanded substantially already, and has further plans to enter the investment space, as well as identity and access management (IAM). Others still have the opportunity to gain sufficient user bases to expand into adjacent offerings, however. SoFi, for example, has graduated from student loans to a broad range of services, and even a banking license.

Ultimately, super apps are positioned to dominate fintech over the next decade, according to the presentation.

Another key trend identified by Yayla is the integration of AI financial assistants into the larger platforms.

Natural language processing and document analysis are the next frontiers for these service ecosystems, Yayla says.

Thales survey shows strong support

A survey from Thales shows that the European Digital Wallet ID will be welcomed by roughly two-thirds of those eligible for it.

Over a quarter of those surveyed (27 percent) currently use a national digital ID system, while 45 percent use less-official means like ID document scans with selfie biometrics checks.

The survey shows that around 5 percent of digital ID users find it challenging to prove their identity to renew an ID document, make a high value purchase, or apply for financial services, but closer to 30 percent of those without it find the processes difficult. Security is the most important characteristic of any digital ID wallet, according to 65 percent of respondents, however.

“By providing citizens with a secure and convenient means of proving their identity and entitlements via a smartphone, the EDIW will enable smooth and secure interactions between citizens, governments and private businesses,” states Youzec Kurp, VP Identity and Biometric Solutions at Thales. “The results of our survey offer providers a better understanding of citizens’ needs, helping them to maximise adoption and use of the new wallets that will be introduced throughout the EU over the next 18 months. Thales as a leader in digital security and trustful provider of digital identities remains fully committed to address those needs thanks to field-proven wallet solutions.”

Thales has also launched a white paper on ‘Understanding the European identity experience.’

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