Navigating the wallet era: how can companies prepare?

Signicat recently hosted a webinar on navigating the wallet era. Three expert panelists from Google Wallet, Datakeeper and the European Commission shared their views on how companies should prepare. The webinar was well received with many insightful questions from the audience. While several of these have been addressed by Esther Makaay in this blog, the original question deserves some attention: how should companies prepare for the wallet era?

I have selected recommendations from the panelists, elaborated on them and added other Signicat learnings and insights. Together, I hope these give some practical first steps on how to best get started.

“Treat wallets as a business opportunity more than a compliance question” 

Take new business opportunity as the starting point was a key recommendation from the panelists. Regulatory compliance and increased security are also important, but are additional side-benefits. 

Already today, payment wallets are widely used among consumers in Europe — with adoption reaching around 70% of the population and accounting for 30% of e-commerce payments, according to Visa and the ECB. By end 2026, all EU member states will launch national EU Digital Identity Wallets (EUDI Wallets) to their citizens. The scope and impact of both private and public wallets in users’ daily lives will grow rapidly. This shift in behaviour will open up new market opportunities that companies should actively seek to capitalise on.

“Don’t prepare - just do it. Pick a technology and start experimenting. Wallets are about learning and adoption. It is a no-regret move”

There are several ways companies can engage with the upcoming wallet ecosystems. The best approach depends on many things, but three important factors are worth considering:

1. How advanced is the company’s current level of digitalisation?
2. What are the long-term strategic and business ambitions?
3. How is our business area impacted by other players with stronger market positions or novel approaches?

Strategic thinking and planning are important starting points for preparations. But to have realistic expectations, practical learning and doing are equally important. In the midst of hectic day-to-day operations, looking 2 years ahead can be a challenge. Large companies should consider setting up an independent business development project team within the digital business area to advance the company’s wallet initiatives. The most important thing is to start experimenting and participating in shaping your future.

“See wallets as enablers. They will generate value for businesses. Focus on the core of your customer proposition, wallets will make the user journey simpler, better and safer”

Wallets that combine identity, user attributes and payment credentials can radically change and simplify customer onboarding, check-out and payment. But achieving this in a scale that is economically profitable is not realistic for most companies. What is more realistic is to participate in a future wallet ecosystem to reach and serve customers in a competitive way. 

Building an understanding of different ecosystems requires systematic engagement and testing. Ideally companies also launch actions that increase their value as a partner for third-party ecosystems. This will determine the commercial terms at which they are allowed to join. Target customer growth and more frequent engagement with existing customers through a mobile app. Add more functionality into the app and attributes into customer profiles. Then you have more to bring to the table when joining a wallet ecosystem.

“If you are a wallet issuer, make it easy for Relying Parties to accept your wallet, the credentials, attributes and payment methods in it”.

Only few companies have the brand, loyal customer base, business scale and know-how to become successful wallet issuers. If you aim for that position, the key is to build an ecosystem around your wallet. Attracting users and a high volume of transactions is how wallets compete. This can only be achieved with a comprehensive set of use-cases in the chosen wallet domain. Many of these use-cases come from third-party providers that rely on your wallet ecosystem. To attract relying parties ( those accepting wallet-based onboardings and payments) , you have to make it technically easy to integrate and commercially lucrative to accept your wallet.

“There is a huge amount of investment in the area. Especially interesting is the combination of wallets with personal AI agents”

In the next two years, EUDI wallets are likely to be at the forefront of discussion. But below the horizon, rapid development is also happening within existing and soon-to-be-launched commercial wallets. Large investments are flowing in from global players, as well as from regional and local wallet issuers with more focused strategies.

Commercial wallets will benefit from rapid development and integration of AI based personal agents. These AI agents will automate customer search and purchase flows. Increasingly the customer is not a person but a bot, that doesn’t care about your brand or marketing initiatives. Making your products visible and accessible in a machine-to-machine (M2M) shopping context will be the next big growth challenge.

The practical first steps to take

Here are some practical first steps companies can take:

1. Build understanding through strategic planning and practical experimentation.
2. Set up a wallet project group to drive your wallet learning and app development initiatives.
3. Define your role/s in the wallet ecosystem. Are you aiming to be credential issuer, verifier of credentials, relying party (accepting wallet-based onboardings and payments) or integrator (embedding wallet into your app or service)?
4. Upgrade your IAM and payments infrastructure. Get technically ready for wallet-based interactions, such as W3C VC and DID, OIDC and others.
5. Become familiar with regulatory developments in e.g. GDPR, eIDAS, DSA, PSD and others.
6. Expand user base and build new functionality, like credentials and third-party services, into your mobile app to increase your attractiveness as ecosystem partner.
7. Enrich your customer profile data and aim for increased engagement and transaction volume through your mobile app. Experiment new business models.
8. Participate in wallet pilots and emerging ecosystems to learn their suitability and attractiveness for your business. If realistic, start building your own wallet ecosystem.

About the author

Janne Jutila is the head of Business Alliances at Signicat and also leads the Payments and Wallets expert group . Janne's expertise spans both the commercial and regulatory domains in Digital Identity. He has co-founded and served on the boards of several companies and associations in the technology and finance space and is a frequent speaker globally at identity related conferences.