FinTechTalk: Digital wallets - the global payments revolution

On 28 January 2025, FinTechTalk host Charles Orton-Jones was joined by Sam Boboev, Author & Founder, Fintech Wrap Up; and Dr Ritesh Jain, Founder, Infynit. 

  

Digital wallets 

You can keep your cash, loyalty cards or any sort of digital assets in your digital wallet. There are also digital lockers where you can keep your documents as well. There are open, closed and semi-closed digital wallets. If it’s closed, you can only use it with a specific merchant and you can’t withdraw cash from it.

 

Amazon pay and Google pay are more flexible than that and you can transfer money from them to other wallets too, but you can’t withdraw cash from them – hence the name semi-closed. Open wallets are typically offered by financial institutions (PayPal, Venmo).

 

Apple and Samsung have been pushing their own wallets on their smartphones but now Apple must open up its ecosystem in Europe, which has resulted in several players launching their own wallets. Digital wallets offer convenience and increased security as well.   

 

Different models adopted by providers of digital wallets 

One of the drivers to offer a digital wallet is to accelerate digital adoption. Digital wallets come in different national flavours too. In India, the public infrastructure is very robust with a combination of a payment layer, an identity layer, data exchange and governance layer. Central KYC and electronic KYC are much easier to execute on this infrastructure.

 

The Indian government’s number one priority is digital adoption and so they don’t charge merchant discount rates. Some other wallets only charge when you pay by your credit card and others have limits above which they do take a percentage.

 

Apple was experimenting with issuing a bank card but as it wasn’t a genuine success, they stick with the role of an intermediary and offer products in partnership with financial institutions. Google and Apple wallets can hold digital IDs too, and – thanks to that feature – they may play a key role when users onboard to financial apps and a KYC is performed on them. 

 

Apple and Google leverage access to users’ personal data to personalise their offers and ads based on purchase data. Tokenisation and digital assets open up new perspectives for digital wallets – cryptocurrencies, tokenised physical assets, mortgages, insurance.

 

Rather than diversifying into financial services, Google and Apple will enable their wallets for third party service providers’ offerings. Increasing crypto adoption, stable coins and the potential rise of CBDCs in the future are expected to further increase the use of digital wallets.  

 

The panellists’ insights 

• Digital wallets can be seen as doors to multiple other applications.   
• There is still plenty of room left for innovation in the digital wallet space.  
• The future will be dominated by different brands of interoperable, interconnected open wallets.