It’s 2030 and digital wallets have replaced… your portfolios

Estimated read time 5 min read

It's 2030 and digital wallets have replaced... your portfolios

Bilbao, Spain – The digital wallet is taking a new step towards a form of global domination. Microsoft joins the horde of technology and financial organizations that already support the OpenWallet Foundation (OWF).

During the Open Source Summit Europe, the OWF, an open-source initiative sponsored by the Linux Foundation and focused on the creation of secure and interoperable digital wallets, announced that the software giant was one of these new members. This decision comes on top of important open source contributions from industry leaders such as Google, Ping Identity and neosfer.

Just a few years ago, the expression “digital wallet” (eWallet) was nebulous. Today, it is digital wallets such as Apple Pay, Google Pay and Samsung Pay that are replacing credit cards and cash. But this technology is not limited to contactless payment. Digital wallets are also replacing driver’s licenses or airline boarding passes.

Enable all digital wallets to be interoperable

Everything that you used to do from the wallet that you lug around in your purse or pocket can now be done from digital wallets.

The OWF does not aim to create one more wallet, as explained by Daniel Goldscheider, founder of OpenWallet:

“It’s not about issuing certificates. We’re not going to create standards. It does not try to compete with the OpenID Foundation or The Open Identity Exchange (OIX) on the identification trust side. Instead, we will use these standards to build a shared software that everyone can use in their portfolio”.

The objective? Allow all digital wallets to be interoperable. The OWF wants all wallets to be open, secure (of course!) and versatile.

Google contributed to the code for the identity credential library at the OWF

As stated by Marie Austenaa, head of digital identity at Visa: “You now have everything on your smartphone your tickets, your cars, your boarding pass, your loyalty cards. Behind all this is a digital ecosystem. You and your cards depend on a trusted ecosystem. It is a tool that allows you to interact with the digital world. It is therefore very important to use open source to create an ecosystem that works according to open standards”.

Without this open and reliable ecosystem, we would have to rely on a heterogeneous set of different programs and protocols. No one wants this.

Ola Ben Har, head of developer relations for payments at Google, adds: “We spend a lot of time thinking about how to provide the ecosystem with the right tools and open-source reference implementations. For example, the Android security team works closely with secure element providers to create open-source security solutions”.

Google contributed to the code for the identity credential library at the OWF. This library, which has been open access since 2020, helps developers create applications that comply with the specifications of the ISO/IEC 18013-5:2021 mobile driver’s license.

What does Microsoft bring to this initiative?

Ping Identity, a founding member of the OWF, is committed to providing code components covering various protocols and formats.

As part of a joint contribution, Lissi presented a cross-platform .NET Wallet Framework at the OWF. Resulting from a collaboration with the German initiative IDunion, this framework allows .NET developers to create their own digital wallets, in accordance with the objectives of the European Identity Wallet initiative.

And what does Microsoft bring to this initiative?

Microsoft Pay (formerly Microsoft Wallet) is a mobile payment and digital wallet service that has never been successful. Today, Microsoft is returning to the e-wallet market.

53% of people already use wallets
digital more often than traditional payment methods

Austenaa, from Visa, said the OWF was very excited about Microsoft’s arrival. She expects that we will “hear a lot more about Microsoft. We will solve the security problems between the wallets, which is a key and fundamental problem”.

“Microsoft has been a strong contributor to the development of open identity standards for more than 10 years,” added Pamela Dingle, director of identity standards at Microsoft. “We are delighted to extend our commitment to developing best practices for the security, interoperability and compliance of digital wallets as members of the Open Wallet Foundation”.

So is it about something important? It would seem that yes. A recent Forbes Advisor survey shows that more than half (53%) of people already use digital wallets more often than traditional payment methods. Indeed, 51% of users say that they would stop making purchases from a merchant who does not accept e-wallet payments.

69% of digital wallet users use PayPal

Today, among those who already use digital wallet applications, 69% use PayPal. The other most popular payment options are Google Pay (56%), Apple Pay (53%) and Samsung Pay (52%). Peer-to-peer applications are also popular, with 52% of respondents indicating that they use Cash App and 49% Venmo as a digital payment method. Users mainly access digital wallets via their smartphones (68%) and their smartwatches (41%).

OWF aims to provide a common platform for all these different payment platforms as well as for driving licenses and passports. With such high usage rates, especially among young users, the question is not whether but when e-wallets will replace traditional wallets, in the same way that debit cards have replaced the checkbooks in your pockets and handbags.

And for the most optimistic experts, this will happen in less than ten years.

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