It's 2030, and digital wallets have replaced every card in our purses and pockets
BILBAO, Spain - The digital wallet took another step toward world domination as Microsoft joined the horde of tech and financial organizations supporting the OpenWallet Foundation (OWF).
At the Open Source Summit Europe, the OWF, a Linux Foundation-sponsored open-source initiative focused on creating secure and interoperable digital wallets, announced the software giant as its newest member. The move comes alongside significant open-source code contributions from industry leaders Google, Ping Identity, and neosfer.
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Just a few years ago, the phrase digital wallet -- aka, eWallet -- was still a mystery to most of us. Today, digital wallets such as Apple Pay, Google Pay, and Samsung Pay are rapidly replacing credit cards and cash for purchases both in the real world and online. This technology isn't simply about contactless payment, though. Digital wallets are replacing driver's licenses, airline boarding passes, and even library cards.
Everything you used to do from the wallet in your purse or back pocket can be done now from digital wallets.
The OWF isn't about creating yet another wallet, as OpenWallet founder Daniel Goldscheider explained:
"It's not going to issue credentials. It's not going to create standards. It is not trying to compete with the OpenID Foundation or The Open Identity Exchange (OIX) for identification trust. Instead, we will use these standards to build a common-core shared software that anyone can use in their wallets."
The goal? To enable all digital wallets to be interoperable. The OWF wants all wallets to be open, secure (of course!), and multipurpose.
As Marie Austenaa, Visa's head of digital identity, said in her keynote discussion, "You have everything now on your mobile phone, your tickets, your cars, your boarding pass, your loyalty cards. Behind all that is a digital ecosystem. Both you and your cards are dependent on a trusted ecosystem. It's a consumer tool to interact with the digital world. So it's pretty important that it uses open source to create an ecosystem that works on open standards."
Without that trusted open ecosystem, we'd need to rely on a mixed mess of different programs and protocols. No one wants that.
Ola Ben Har, Google's developer relations lead for payments, added, "We must ensure we build highly secure and privacy-preserving solutions. At Google, we're spending a lot of time thinking about how to ensure that we provide the right tools and open-source reference implementations for the ecosystem to accomplish the goal. For example, the Android security team is working very closely with secure element vendors around the world to build open-source, hardware-backed security outlets that can be used for just new and upcoming use cases."
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Google has contributed its identity credential library code to the OWF. This library, which has been open-sourced since 2020, aids developers in creating applications that align with the ISO/IEC 18013-5:2021 mobile driver license specifications. It includes a production-quality example wallet and verifier applications.
Ping Identity, an OWF foundational member, has pledged to contribute code components covering various protocols and formats. The company indicated it would provide a reference implementation to enhance interoperability with the Ping Identity ecosystem.
In a joint contribution, neosfer's esatus and Lissi are introducing their multi-platform Wallet Framework .NET to the OWF. Originating from a collaboration with the German initiative IDunion, this framework empowers .NET developers to create their own digital wallets, aligning with the European Identity Wallet initiative's goals.
And what is Microsoft bringing to the table?
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Microsoft Pay (formerly Microsoft Wallet) is a mobile payment and digital wallet service that never gained much traction. Now, Microsoft is re-entering the eWallet space.
Visa's Austenaa said the OWF is very excited about Microsoft joining. She expects we're "going to hear a lot more from Microsoft. We're going to solve the security challenges across the wallets, which is a key and fundamental problem."
"Microsoft has been a strong contributor to open identity standards development for over 10 years," added Pamela Dingle, Microsoft's director of identity standards. "We are excited to expand our commitment to developing best practices for the security, interoperability, and compliance of digital wallets as members of the Open Wallet Foundation."
Is this going to be a big deal? It sure looks like it. A recent Forbes Advisor survey found that over half (53%) of people are already using digital wallets more often than traditional payment methods. Indeed, 51% of users say they would stop shopping with a merchant that doesn't accept eWallet payments.
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Today, of those already using digital wallet apps, 69% use PayPal. The next most popular payment options are Google Pay (56%), Apple Pay (53%), and Samsung Pay (52%). Peer-to-peer apps are also popular, with 52% of respondents indicating they use Cash App and 49% using Venmo as a digital payment method. Users primarily access digital wallets via their smartphones (68%) and smartwatches (41%).
OWF aims to provide a common platform for all these various payment platforms as well as driver's licenses, passports, and your kid's school photos. With such high use numbers, especially from younger users, the question isn't whether but when eWallets will replace traditional wallets the same way debit cards replaced checkbooks in your pockets and purses.
The smart money says they'll be dominant by decade's end.