A wallet is a way of organising things. My Apple Wallet, just like my real wallet, doesn’t have any cash in it. It has credit cards, debit cards, loyalty cards, vaccination records, boarding passes, train tickets and driving licences (Apple have just gone live with their driving licence and state in Arizona). These things are all held independently in the wallet: they don’t talk to each other and they don’t share data with each other. They are also, as you will have noticed, mostly about identity, not money.

The fact that wallets are really about identification, authentication and authorisation is recognised in, for example, the European Digital Identity Wallet initiative. Under this initiative countries will offer citizens and businesses digital wallets that will be able to link their national digital identities with proof of other personal attributes (e.g., driving licence, diplomas, bank account, COVID-19 vaccination details and so on). These wallets may be provided by public authorities or by certified private entities (presumably banks will be one category of wallet provider). Similarly, down under, the government of New South Wales has begun work on a digital wallet (they call it a “credential vault”, which I think is a much more accurate but much less marketable name) that will allow citizens to prove their identity and share decentralised credentials.

With underlying standards such as W3C “Verifiable Credentials” (VC) evolving, it does not seem fanciful to imagine interoperable digital wallets (provided by governments, or banks, or big techs or whoever) delivering a safe and secure ecosystem for citizens and consumers.

The Mobile Way

Wallets are one way forward, then. But if you have a successful and widely-used mobile payment scheme then there must be a great temptation to evolve it into a super app rather than remain content with being either a standalone payment app or one among many options in someone else’s wallet. PayPal, to choose an obvious case study, is steadily adding features to turn it from a payment scheme into a super app. PayPal savings, shopping, bill payments, reward, gift cards, by now pay later (BNPL) and cryptocurrency are coming together in a single app that you need only log into once to have access to a spectrum of related services.

There are plenary of other examples of successful payment schemes evolving into super apps. M-Pesa, the most successful fintech in Africa, recently introduced its own super app across all its markets. It gives consumers access to another spectrum of services from e-commerce to e-government as well as a network of partners that them to send and receive money from more than 200 countries and territories. The M-Pesa open API is already being used by more than 45,000 developers and 200,000 SMEs and the company is expanding its ecosystem to reach large-scale and micro-enterprises.

Klarna and Shopify, to name two other obvious candidate super apps, have been steadily expanding their range of services. Klarna launched their new app last November, consolidating instalment payments with shopping, support, delivery and returns with the goal of transforming themselves from being a payment provider into being an end-to-end offering across all online destinations whether connected to Klarna or not. (They also acquired comparison site Pricerunner for €930m in order to broaden their range of super app shopping services.)

What is the real difference between a digital or mobile wallet and a super app then? One way to draw the boundary is by saying that a super app shares an identity across its ecosystem of services whereas in a wallet each of the credentials may be linked to a different digital identity. The former offers undoubted convenience for consumers and incentive for merchants to join the ecosystem, but also has implications for privacy.

Personally, I want a smart wallet not a super app. I rather like the idea of going to log in somewhere and when I am asked if I am over 18, or have a drivers licence, or am a British citizen then have the wallet on my phone pop up with a list of credentials that a) will satisfy the criteria and b) are acceptable to whoever is asking, so that I can choose one and go about my business. I expect the wallet to present the credentials in privacy-maximising order, so that for almost all such interactions my “John Doe” IS-OVER-18 credential will be the default to present the persistent pseudonym necessary to enable the overwhelming majority of transactions.

In other words, any wallet can protect my money but the smart wallet is the wallet that protects my identity.

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