Digital Wallet Business Approaches

State of Digital Wallets – Part 14/16


This post, “Digital Wallet Business Approaches,” is an excerpt from a report entitled The Current and Future State of Digital Wallets, which is being shared here as a 16-part series. Download a copy of the report. Read a complete summary.


The early successes with Digital Wallets Business Approaches will be a simple application of the technology to meet specific use cases. That said, broad wallet initiatives at this time are ill-advised. To progress at this early stage, there are a few things to consider.

​Single-Purpose Use Cases – Digital Wallets Business Approaches 

Generally, applying a Digital Wallet to a single-purpose use case will be the most straightforward road to success. Examples include:

Receive and Share

Using a Digital Wallet to receive and share a particular Credential that is generally painful when not done using Verifiable Credentials.

  • BC Government’s VON, which creates Verifiable Credential versions of corporate registrations, is a starting point. It will evolve to include permits, licences, and other Credentials that anchor back to the corporate registration. BC Government has avoided tying a Person to an Organization, partially due to the immaturity of applying Delegation via Digital wallets. After gaining a better understanding of the issue, they will likely move forward.
Multiple Parties

Using a Digital Wallet to meet a particular use case with multiple parties. Here are some examples:

  • ATB Financial worked with IBM and Workday to prove an employee onboarding/transfer use case. IBM issued an employee credential through its HR technology partner’s system (Workday). The employee then used that Credential to open a bank account. Subsequently, the bank returned the account information to the employer (IBM) for automated salary deposit. The project proved the utility of sharing high-quality, trusted data to automate processes. Past approaches would have required deep integration with systems and APIs. However, history has shown that even the most prominent organizations can only afford so much formal integration.
Basic Form

Using in basic form while advanced use cases evolve. There are foundational steps that organizations can take in any systems architecture approach, and these should be pursued and aimed at simple but broad use cases.

  • CULedger uses a basic Verifiable Credential to provide a common authentication Credential. This Credential allows credit unions to reassert control of the authentication process. The current authentication processes are fractured and inconsistent, with many credit union members needing to manage multiple usernames and passwords. As CULedger develops, they plan to offer community credentials. Further understanding is required to see how far this potential goes.

A mini-wallet approach may be helpful. It involves storing a single credential inside an application for later use. Organizations can use this approach to provide a second-factor authentication (2FA) strategy for mobile applications.

The leaders pursuing the example approaches are not ignoring the potential of digital wallets. They use the single-purpose use cases as building blocks to prepare for their next steps. Focusing on one use case allows them to achieve incremental progress that they can build on.

​Backup & Recovery is Mandatory

This study found that all Digital Wallet applications have a crucial weakness – none have viable backup strategies. While users can back up data, the processes required are incredibly demanding for multiple reasons::

  • Frequency of Backup. The Digital Wallets change contents regularly, which means the backup files need to be updated. As Digital Wallet use increases, these updates could be constant as messages, notifications, and consents are used.
  • Loss of Keys. Using mnemonics as seeds to control a Wallet is a beginning step, but asking someone to store this seed securely is not realistic.
  • Complexity. Managing a Digital Wallet at this time is complex enough that very few, your author not included, will safely use Digital Wallets beyond trivial use cases.

Simple Trust Hubs – Digital Wallets Business Approaches

Managing the list of Issuers you can trust is crucial to early success. If you don’t know that a particular Issuer is “official” or “trusted,” you can’t do much with the contents of a Digital Wallet.

Until there are formal standards and approaches to managing the definitive lists of Issuers, any systems in development need to control the Issuers that are “trusted.” This is quite manageable at a small scale, but complexity will emerge as different bubbles of activity connect.

Therefore, using a configurable list of Issuers managed by a repeatable and trusted process will be crucial.


This post, “Digital Wallet Business Approaches,” is an excerpt from a report entitled The Current and Future State of Digital Wallets, which is being shared here as a 16-part series. Download a copy of the report. Read a complete summary.

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