The Wallet Wars

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Written by Continuum Loop


By now, it’s clear that the digital wallet space is heating up. With the formation of the OpenWallet Foundation and major players like Apple, Amazon, and Google developing their wallets, it’s safe to say that the war isn’t coming – the Wallet Wars have started.

The Rise of Digital Wallets

With the growth of digital currencies like Bitcoin and inevitable identity applications, it’s no surprise that the digital wallet market is projected to explode in the next few years. According to several recent reports, the number of digital wallet users is expected to reach 5.2 billion by 2026, with an estimated transaction value of USD 12 trillion. This market is enormous.

Digital Wallets will be versatile and carry a variety of credentials. The most prominent use cases right now are for payment (fiat and, far behind, cryptocurrency), but the potential is vast. In the future, Digital Wallets will hold identity information to expedite everything from travel to health care services. 

The Battle Ground

The major players in the digital wallet space are Google, Apple, and Samsung and then a long list of mostly failed bank wallets. They are all jockeying for the top position in the digital wallet race, hoping to make their wallets the default option on mobile devices. The minor players are startups developing innovative new technologies that could significantly advantage the companies that adopt them. These startups are developing new identification and authentication methods to improve the user experience of digital wallets.

Who Is Already Out?

In 2019, Facebook took a step into the world of finance with its digital wallet Calibra and announced the launch of a crypto token Libra. Calibra allowed users to store and exchange fiat currencies and make payments through Messenger and WhatsApp. In 2020, a change in direction saw the company rebrand to Novi.

Facebook has already stepped back, and they shut down the Novi pilot in 2022. If you look at where they are investing, though, they will likely return.

Following years of governance scandals, it’s fair to say that Facebook’s reputational troubles impeded its ability to ‘move fast and break things’, as crypto raised the stakes for regulatory concerns around issues like money laundering and currency volatility. Natasha Lomas, Senior Reporter, TechCrunch

Who will win the wallet wars?

It’s still too early to say who will ultimately win the wallet wars. But one thing is sure: the battle for your digital identity is just getting started.

The fight for payment processing is likely to be won by the company that can provide the most effortless and seamless payment experience for merchants. And the battle for identity is likely to be won by the company that can provide the most secure, comprehensive and convenient digital wallet for consumers.

Around the world the transition from physical wallets to digital wallets is well underway. An Accenture survey of 16,000 customers in 13 countries found that 56% of them were using digital wallets more than five times every month (compared with only 48% using cards that often) and they interpret these results to mean that heading towards a hundred billion dollars of annual payments revenues for banks are “at risk”. David Birch, Global Advisor and Investor in Digital Financial Services

Challenge That Remains

However convenient as digital wallets may be, they are not without drawbacks, and one of the biggest challenges faced is backup and recovery. Chapter 9.7 of the SSI Book states, “a well-designed and engineered digital wallet should be safer and better protected from loss than a physical wallet, but only if the owner takes the necessary recovery preparation steps.

So, what’s the best way to protect your digital wallet? It’s more complex, and bluntly, there are yet to be compelling answers. But – most of the things we’re putting in our wallets can be replaced, just like what happens if you lose your physical wallet.

User identity management and backup/recovery can be difficult, especially as organizations seek to minimize the risks associated with storing personal information.

Backup and recovery are still challenging, especially as organizations seek to minimize the risks associated with storing personal information. The answer might be that users take back control of their identities and become personally accountable for their security and recovery. Organizations can drastically decrease their risk burden by empowering individual users to manage their identities.


Recently, I discussed the advantages of digital wallets with my parents regarding safety and security. The risks associated with a physical wallet—like getting stolen or lost—are significant. On the other hand, digital wallets require passwords and other forms of authentication to ensure that only authorized individuals can access them. I reminded my dad that at any time, I could take his physical wallet and use his cards. But I would never be able to access his phone or digital wallet because I don’t know the password and can’t pass the biometric identification. My dad was intrigued by these enhanced security protocols and agreed that switching to a digital wallet was worth looking into.

What’s to Come

The future of digital wallets is likely to be defined by security and interoperability. Trust registries will anchor both.

On the security front, trust registries will make it impossible for bad actors to share and issue fake credentials. On the interoperability front, we will see the development of new standards that will enable different digital wallets to work together—allowing users to choose the digital wallet that best suits their needs without worrying about compatibility.

If you’re considering entering the digital wallet market, now is the time. With so much growth expected, there’s a massive opportunity for organizations to get involved in this rapidly growing industry.

It’s an exciting time for the industry, and we can’t wait to see what comes next! 

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Ecosystem Strategy
Trust Registries
Digital Wallets

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