What’s the best way to manage relationships?
There’s a lot of talk of super apps right now as a multitude of gamers are trying to become the western equivalent of Asian app giants like Alipay, Gojek and Kakao. But how do you get from a digital wallet to a super app? And most importantly, are wallets or super apps the best way to manage the relationship between people and their economic avatars? Do you really want an app to do everything, be it awesome or not? What is the difference between a wallet and a super app anyway?
The starting point is mobile payment, and the trends here are pretty clear. As Christine Wagner, Head of Global Payments Products for FIS said on a podcast together with the Mercator Advisory Group last year “even in the USA we found that the checkout at the point of sale with mobile wallets has increased by an incredible 60%”. People seem very comfortable using their phones to make payments, and wallets are a pretty good way to manage their payment experience. When I go to my local grocery store, both my merchant co-brand credit card and merchant loyalty card are conveniently stored in my Apple
(By the way, why they are separate when I should be able to pay with my authenticated loyalty card is a different story.)
A wallet is a way of keeping things organized. Just like my real wallet, my Apple Wallet does not contain any cash. There are credit cards, debit cards, loyalty cards, vaccination cards, boarding passes, train tickets and soon driver’s licenses (although Apple’s plans for the driver’s license in the wallet have recently been thrown back a bit). These things are all stored independently of one another in the wallet: They do not speak to one another and do not share any data with one another. Also, as you have probably noticed, it is mostly about identity, not money.
The European Digital Identity Wallet Initiative, for example, recognizes that wallets are really about identification, authentication and authorization. As part of this initiative Countries will offer citizens and businesses digital wallets who will be able to link their national digital identity to proof of other personal characteristics (e.g. driver’s license, diplomas, bank account, COVID-19 vaccination data, etc.). These wallets can be provided by public authorities or by certified private institutions (banks will presumably be a category of wallet providers). The government of New South Wales did well down under has started work on a digital wallet (they call it a “credential vault” which is a much more accurate but much less marketable name in my opinion) that allows citizens to prove their identity and share decentralized credentials.
With standards evolving like W3C Verifiable Credentials (VC), it doesn’t seem fantastic to think of interoperable digital wallets (provided by governments, banks or big tech or whoever) that provide a secure ecosystem for citizens and consumers.
The mobile way
So wallets are a way forward. But if you have a successful and widespread mobile payment system, then the temptation must be great to develop it into a super app rather than settling for a standalone payment app or one of the many options in the wallet of one to be another. PayPal