Digital Wallet Platforms

Digital wallets (DWs) are the number 1 and fastest growing payment method globally. Yet not all DWs are the same. This is an analysis of the different players and business models behind them. These are 3 reasons why you should pay attention to DWs: —  5.2 bn users globally by 2026 —  50% e-com global share ($3.1 tn) —  30% POS global share ($10.8 tn) To understand how DWs differ (#strategy, positioning) we need to categorize them. These are my criteria: 1)  The types of players that are behind them: SuperApps, BigTechs, e-commerce players, banks, crypto providers, telecoms, big brands, etc. 2)  How they manage funds: DWs such as Apple or Google Pay (pass-through) don’t have their own balance, others such as PayPal process funding and #payments in separate stages, whereas Alipay and WeChat Pay are stored wallets, pre-loaded with funds. 3)  The kind of use cases they support (online or in-store with P2P, C2B, B2C, B2B, C2G and G2C variations). 4)  Their #technology: QR-codes (widespread in Asia) vs NFC (popular in Europe) or crypto wallets are examples. 5)  Their target audience: merchants, marketplaces, big brands, niche users, etc. 6)  The payment methods they support: credit or debit cards, bank accounts (A2A transfers), crypto, etc. Based on the above, I have identified 10 distinctive DW plays: 1. SuperApps in Asia that have evolved from simple wallets facilitating payment use cases to huge ecosystem behemoths with multiple plays (consumer, merchant, government, lending, etc).   2. Bigtechs like Apple and Google using DWs as vehicles to monetize their user base and expand beyond their core offering. 3. #ecommerce platforms like Amazon, Mercado Pago or Rakuten looking to boost their business and create new growth opportunities. 4. Ecosystem players in local or regional markets that use DWs to bring payments, digital platforms and mobile banking functionalities under one umbrella. 5. Banks looking to compete with new value-chain challengers (fintechs, platforms) on their own (front-end) customer-facing game. 6. A2A players like Venmo or Zelle focusing on social features, P2P payments, instant transfers, bank integration and competitive pricing to expand their offering. 7. Niche players using customization, vertical focus, rewards and loyalty programs and specialized offerings to service specific use cases (i.e. gambling, gaming, FX). 8. Crypto & blockchain players using DWs to bridge the gap with the fiat world and to offer new use cases. 9. Big brands like Starbucks leveraging DWs to build closed-loop FS ecosystems. 10. Telecoms in Africa employing DWs as a replacement for core-banking infrastructure.   DWs’ spectacular rise is not only democratizing access to #payments and to broader FS faster than any other point in history but it is also forcing players across the value chain (providers, merchants, banks, platforms, fintechs) to re-think their entire positioning and strategy. Opinions and graphics: Panagiotis Kriaris

𝗦𝘁𝗼𝗿𝗲𝗱 𝘃𝘀 𝗦𝘁𝗮𝗴𝗲𝗱 𝗗𝗶𝗴𝗶𝘁𝗮𝗹 𝗪𝗮𝗹𝗹𝗲𝘁𝘀 Not all digital wallets work the same. Let's take a look at staged vs stored wallets, what their key differences are, when to use each, and how each type can make or break a digital wallet strategy. Let’s break it down ⤵️ 𝗦𝘁𝗼𝗿𝗲𝗱 𝗪𝗮𝗹𝗹𝗲𝘁𝘀 🔹Think Apple Pay, Google Pay, Alipay 🔹These are wallets where payment credentials (DPANs) are stored on the user’s device, not by the merchant. Here’s how they work: 🔹𝗔𝘁 𝗰𝗵𝗲𝗰𝗸𝗼𝘂𝘁 → the wallet issues a single-use tokenized card (DPAN) tied to the user’s actual card 🔹𝗔𝗽𝗽𝗿𝗼𝘃𝗮𝗹 → the issuer still approves the transaction, and Apple/Google act as intermediaries 🔹𝗣𝗔𝗡 𝘃𝗶𝘀𝗶𝗯𝗶𝗹𝗶𝘁𝘆 → The merchant never sees the PAN or CVV 𝗣𝗿𝗼𝘀 ✅ Reduces PCI scope dramatically ✅ Fast, secure checkout with biometric auth ✅ Works well for one-time purchases or tap-to-pay 𝗖𝗼𝗻𝘀 🚫 If a user changes phones, their DPAN changes 🚫 Limited control for the merchant, no retries 𝗦𝘁𝗮𝗴𝗲𝗱 𝗪𝗮𝗹𝗹𝗲𝘁𝘀 ▪️Think 7-Eleven, Starbucks App ▪️These wallets store payment credentials centrally on backend servers. Here's how they work: ▪️𝗗𝘂𝗿𝗶𝗻𝗴 𝗰𝗵𝗲𝗰𝗸𝗼𝘂𝘁 → the customer interacts with the wallet UI, say the Starbucks app ▪️𝗧𝗿𝗮𝗻𝘀𝗮𝗰𝘁𝗶𝗼𝗻 𝗳𝗹𝗼𝘄 → the wallet triggers the transaction on behalf of the user, using the stored payment method ▪️𝗥𝗲𝗱𝘂𝗻𝗱𝗮𝗻𝗰𝘆 → this gives full control over retries, scheduling, and alternative funding 𝗣𝗿𝗼𝘀 ✅ Ideal for loyalty, top-ups, reorders ✅ Enables complex workflows like delayed charges & variable pricing ✅ Merchants can store cards using tokenization to keep PCI scope low 𝗖𝗼𝗻𝘀 🚫 Slightly more PCI burden if not using a third-party vault 🚫 More dev work to implement 🚫 Can be riskier if sensitive data is stored improperly 𝗪𝗵𝘆 𝗧𝗵𝗶𝘀 𝗠𝗮𝘁𝘁𝗲𝗿𝘀 🔹Choosing the right digital wallet model isn't just about the experience, it affects: → Authorization rates → Fraud liability → Long-term billing stability → Control over the payment flow 🔹𝗙𝗼𝗿 𝗲𝘅𝗮𝗺𝗽𝗹𝗲 → a meal delivery app that charges customers per order or with weekly subscriptions would suffer high churn using Apple Pay. 𝗪𝗵𝘆? 🔹𝗦𝗶𝗹𝗲𝗻𝘁 𝗳𝗮𝗶𝗹𝘂𝗿𝗲𝘀 → when the DPAN tied to the user’s phone changes, the subscription fails 🔹𝗧𝗵𝗲 𝗱𝗶𝗳𝗳𝗲𝗿𝗲𝗻𝗰𝗲 → a staged wallet avoids this by storing the card centrally via tokenization, letting the merchant retry failed payments or switch funding methods 𝗧𝗮𝗸𝗲𝗮𝘄𝗮𝘆 𝗨𝘀𝗲 𝘀𝘁𝗼𝗿𝗲𝗱 𝘄𝗮𝗹𝗹𝗲𝘁𝘀 𝘄𝗵𝗲𝗻 → You want fast, secure one-time payments → You’re optimizing for mobile/web checkout UX 𝗨𝘀𝗲 𝘀𝘁𝗮𝗴𝗲𝗱 𝘄𝗮𝗹𝗹𝗲𝘁𝘀 𝘄𝗵𝗲𝗻 → You need control over recurring billing, retries, or stored cards → You’re building platforms, loyalty programs, or multi-payment journeys Source: AltexSoft, Visa 🔔 Follow Jason Heister for daily #Fintech and #Payments guides, technical breakdowns, and industry insights.

Mobile wallets used to feel like a nice little add-on. Now, they’re how nearly everyone pays. This new report explores how mobile wallets have become the core payment method in many markets, especially where cards and banks aren’t the default. Here are my key takeaways: 🔶 More than 4 billion people already use a mobile wallet. That figure could reach 5.8 billion by 2029, with most of the growth coming from Asia, Africa, and Latin America. 🔶 Wallets now serve as full financial hubs, handling everything from bill payments and cross-border remittances to merchant payouts, subscriptions, and small business accounting. 🔶 In regions like Southeast Asia and sub-Saharan Africa, telecom-backed wallets dominate because they’re simple, widely accepted, and don’t require a bank account. 🔶 Fragmentation is still a major problem. Many wallets don’t talk to each other, forcing users and merchants to juggle multiple apps just to operate across borders. 🔶 What’s driving adoption isn’t bells and whistles, but it’s low fees, instant access, and the ability to get paid without waiting on banks. 🔶 Wallets are often the first entry point into the digital economy for micro-merchants, freelancers, and rural users. That’s putting pressure on governments to improve compatibility across systems. 🔶 Behind the scenes, companies like Thunes are stitching together a global network that lets users send money between wallets, countries, and currencies, all in real time. 🔶 Mobile wallets are giving people more ways to move money when banks and cards aren’t available or don’t work well. This is where growth is actually happening. And it’s not where most people are looking. #fintech #digitalwallets #financialinclusion #couchonomics #payments #embeddedfinance #digitalassets #futureofmoney #futureoffinance NORBr Onalytica Favikon ⁠Global Finance & Technology Network Thinkers360 - ⁠- - - - - - - - - - - - - - - - - - - - - - - - - - - 👍 Hit like ♻️ Share it with your network 📢 Drop a comment 🎙️ Check out my podcast Couchonomics with Arjun on YouTube 📖 Get my weekly newsletter on LinkedIn: Couchonomics Crunch 🕺💃 In the MENA region? Join our Fintech Tuesdays community. 🤝 Let's connect! - ⁠- - - - - - - - - - - - - - - - - - - - - - - - - - -

Digital Wallet Apps: how do they work? Basically, there are 3 distinct groups of B2C wallet apps: 1️⃣ 𝗣𝗮𝘀𝘀-𝘁𝗵𝗿𝗼𝘂𝗴𝗵 𝘄𝗮𝗹𝗹𝗲𝘁𝘀; commonly designed as mobile-first, keep tokens that link to your credit and debit cards instead of storing sensitive data or money directly. They don’t take part in moving funds. Once a transaction is initiated, such apps just pass encrypted information to a merchant — hence, the name. In the course of further payment processing, the token travels to a payment network to be decrypted and checked against the actual card or account information in the issuing bank. After verification, the payment gets approved and sent to a merchant’s acquiring bank. So, only the network and an issuing bank will know the actual card or account details. Known for high security, pass-through wallets act essentially as extensions of credit and debit cards, so they are more widespread in regions with high card adoption, such as Europe and North America. Major examples: Apple Pay, Samsung Wallet, Chase Mobile app 2️⃣ 𝗦𝘁𝗮𝗴𝗲𝗱 𝘄𝗮𝗹𝗹𝗲𝘁𝘀; also house tokenized payment details but don’t transmit them anywhere. Instead, they perform transactions in two stages. At the funding stage, the wallet acquires money from a customer’s bank account, credit line, or other source. Then, at the payment stage, it sends funds to a merchant. In this scenario, a wallet provider can make additional fraud assessments. At the same time, a payment network or card issuer may know nothing about details of a particular transaction that are disclosed during operations with pass-through solutions. Staged options often support peer-to-peer transfers and cryptocurrencies and allow for storing funds right in the wallet’s account. Major examples: PayPal, Google Wallet (former Google Pay), Cash App (the US and UK only) 3️⃣ 𝗦𝘁𝗼𝗿𝗲𝗱 𝗱𝗶𝗴𝗶𝘁𝗮𝗹 𝘄𝗮𝗹𝗹𝗲𝘁𝘀; work as prepaid cards. Before making a transaction, a user must load money to a wallet’s balance from a bank account, debit or credit card, via peer-to-peer transfer, etc. The availability of funding sources differs across providers, depending on the location and targeted users. A merchant withdraws money directly from the wallet. Stored wallets are especially popular in unbanked and underbanked countries since they enable people to deposit money without having a bank account. Major examples: Apple Cash (US only), Alipay (China’s most popular), WeChat Pay, Paytm Wallet (India’s largest platform for instant payments). The table below made by AltexSoft compares several global digital wallets👇 I highly recommend reading the complete deep dive article on this topic to learn all about this: https://lnkd.in/eU5Zbd5w Find this helpful? [ 𝗿𝗲𝗽𝗼𝘀𝘁 ] Anything to add about this subject? [𝗶𝗻𝘃𝗶𝘁𝗲𝗱 𝘁𝗼 𝗰𝗼𝗺𝗺𝗲𝗻𝘁] Nice story, Marcel. Next! [ 𝗹𝗶𝗸𝗲 ]

𝐃𝐢𝐠𝐢𝐭𝐚𝐥 𝐖𝐚𝐥𝐥𝐞𝐭 — how do they work & where?👇 —— 𝐖𝐡𝐚𝐭 𝐢𝐬 𝐚 𝐃𝐢𝐠𝐢𝐭𝐚𝐥 𝐖𝐚𝐥𝐥𝐞𝐭: A digital wallet, also known as an electronic or e-wallet, is any application that enables individuals and businesses to make transactions over computer networks using multiple payment options — credit and debit cards, preloaded funds, cryptocurrencies, BNPL, etc. To ensure safety, e-wallets apply several layers of protection, such as data encryption, multi-factor authentication, and tokenization (the app replaces real payment details with a unique token) —— Basically, there are 3 distinct groups of B2C wallet apps: 1️⃣ 𝗣𝗮𝘀𝘀-𝘁𝗵𝗿𝗼𝘂𝗴𝗵 𝘄𝗮𝗹𝗹𝗲𝘁𝘀 — commonly designed as mobile-first, keep tokens that link to your credit and debit cards instead of storing sensitive data or money directly. They don’t take part in moving funds. Once a transaction is initiated, such apps just pass encrypted information to a merchant — hence, the name. In the course of further payment processing, the token travels to a payment network to be decrypted and checked against the actual card or account information in the issuing bank. After verification, the payment gets approved and sent to a merchant’s acquiring bank Known for high security, pass-through wallets act essentially as extensions of credit and debit cards, so they are more widespread in regions with high card adoption, such as Europe and North America i.e. — Apple Pay, Samsung Electronics Wallet, Chase Mobile app —— 2️⃣ 𝗦𝘁𝗮𝗴𝗲𝗱 𝘄𝗮𝗹𝗹𝗲𝘁𝘀 — also house tokenized payment details but don’t transmit them anywhere. Instead, they perform transactions in two stages At the funding stage, the wallet acquires money from a customer’s bank account, credit line, or other source. Then, at the payment stage, it sends funds to a merchant In this scenario, a wallet provider can make additional fraud assessments. At the same time, a payment network or card issuer may know nothing about details of a particular transaction that are disclosed during operations with pass-through solutions i.e. — PayPal, Google Wallet, Cash App (US & UK). —— 3️⃣ 𝗦𝘁𝗼𝗿𝗲𝗱 𝗱𝗶𝗴𝗶𝘁𝗮𝗹 𝘄𝗮𝗹𝗹𝗲𝘁𝘀 — work as prepaid cards. Before making a transaction, a user must load money to a wallet’s balance from a bank account, debit or credit card, via P2P transfer, etc. The availability of funding sources differs across providers, depending on the location and targeted users. A merchant withdraws money directly from the wallet Stored wallets are especially popular in unbanked & underbanked countries since they enable people to deposit money without having a bank account i.e. — Apple Cash (US only), Alipay, WeChat Pay, Paytm Wallet (India’s largest platform for instant payments) & work of art merchant wise — Starbucks ☕️ —— Source: AltexSoft & https://lnkd.in/g8TtvEAr ► Sign up to 𝐓𝐡𝐞 𝐏𝐚𝐲𝐦𝐞𝐧𝐭𝐬 𝐁𝐫𝐞𝐰𝐬 : https://lnkd.in/g5cDhnjC ► Marcel van Oost and Connecting the dots in payments...