This post is an excerpt from an upcoming report entitled The Current and Future State of Digital Wallets, which is being shared here as a 16-part series. To receive a copy of the report, please register here and we will get the current draft sent out immediately and a PDF of the final report when it is ready. This is the third post. For the first post click here, for the previous post click here, and for the next post click here.


We’re beginning to sense that our Digital Wallet is going to become more important to us than our physical wallets. Think about what you would rather leave at home when you go out – your phone or your physical wallet? Many of us can make it without the wallet – but without our phones we feel naked.

Why is that?

Our phone is already our Digital Wallet. It isn’t nearly where Digital Wallets are going to be but it is already doing many of the things that we expect a wallet to do. With our smartphone we can:

  • pay for things
  • send and receive messages
  • receive and show credentials
  • manage our keys – though we don’t have a clue how or why we need this…

What we don’t have is a coherent way of using any of the above. It varies wildly and most of it isn’t easy to use.

​What Is At Risk

Digital Wallets are already around as we have mentioned but they are in a very early state. As Digital Wallets evolve though there are risks that need to be acknowledged and mitigated. The risks at this early stage are:

  • Lock In – with a lack of open standards and much to learn it is quite possible that early Digital Wallets will effectively hold your information hostage as you won’t be able to move information around.  
  • Surveillance – what assurances do you have that the Digital Wallet application that you’re using isn’t sending information off to an entity that you haven’t agreed to share with (e.g. company or state actor)?
  • Theft & Loss – Digital Wallets can be stolen physically (i.e. your Smartphone is stolen or lost)  or virtually (i.e. your Digital Wallet has been taken over due to key compromise).
  • User Experience – in the early days the user experience of using Digital Wallets will be crucial. People will not adopt things if they are confusing or difficult.

This post is part of a 16-part series. This is the third post. For the first post click here, for the previous post click here, and for the next post click here.