Our regular look at the stories making news from around the decentralized identity community. In this edition, we look at the real focus behind digital wallets, “super apps” and “super credentials,” and the ongoing efforts to provide regulations around digital identity.
By Tim Spring
David G.W. Birch, a contributor to Forbes magazine shares his thoughts and some insightful statistics into how far digital wallets have already ingrained themselves into our society. For example, a recent study by Mastercard revealed that “around half of all Brits think that physical wallets will become less relevant, with a fifth of them (and two-fifths of millennials) saying that they do not expect to carry a wallet or a purse within five years.”
The article goes on to discuss the continuing decline of cash, referencing the UK Financial payment Markets Summary and its findings that 10 years ago, 60% of payments were made in cash, and we are on track for that number to fall to 6% by 2031. With people using less cash, there is, frankly, only one reason left to carry a wallet and that is for your identification. Carrying a driver’s license or a membership card still has value for the moment, but with credentials offering a more secure, more convenient alternative, it’s likely only a matter of time before the physical wallet is a relic of the past.
Connie Chan writes for a16z defines a super app as “an application that builds upon its core functionality to mix and mash a bunch of seemingly unrelated services.” The term has been gaining in currency, usually in reference to Meta, Microsoft, and Twitter as each tries to provide convenience to their customers by having everything run through their one application. The poster child for these kinds of apps is WeChat, which comes out of China. Through one interface, users have access to texting, city services, utility payment, and even streaming videos.
Is everyone going to migrate to one of a few super apps and do everything within one platform architecture— or would it make more sense to use “super” credentials created from strict identity assurance processes to be able to access any platform or service you choose? The distinction isn’t just about freedom to roam an open internet, although that is a powerful argument in favor of credentials over apps; it’s also about who gets to access your data and where your data is stored.
To read a little more on how Indicio see’s super credential technology progressing you can read this recent article by Indicio CEO Heather Dahl and VP of Governance Trevor Butterworth.
In this summary of a recent interview between Karen Webster of PYMNTS and Francisco Leon, CEO of PayU Latam, we learn that Latin America is looking to position itself as a leader in the global economy through innovations in payments and partnership technologies.
Pointing to Latin America having a high smartphone penetration, Leon says that this area is “an ideal proving ground for super apps and new forms of instant payments, from P2P to the growing use cases around ‘person to merchant’ (P2M).” The combination of many people with access to smartphones and many small-to-medium-sized businesses creates the need for partnerships and platforms to find these businesses.
PayU is working to be the secure payment method that makes the whole experience quick and easy for the end user on these applications. Leon says the driving force behind many of these partnerships is the recent economic downturn; with fewer investors able to offer funding, new businesses have been forced to adapt and realize that, even if they are working with a competitor, “a rising tide lifts all boats.”
In Biometric Update, Frank Hersey summarizes the latest discussion on public policy and digital identity held by Westminster’s eForum. TechUK, a trade body, argued for interoperability—both for public and private digital identity and for international interoperability as a foundation for building public trust and confidence; a framework to deliver that interoperability was urgent. Iproov, a leading biometrics company, called for political leadership to channel the innovation and policy discussion around digital identity. The lack of political engagement means that no decision has been made on embedding verifiable credentials in digital identity wallets, something the EU has decided to do. Hersey’s summary continues with discussion on the state of fraud and the need to take the security problem away from users and give them technology that solves the problem. There’s lots more and this is well worth a read to get a sense of how important digital identity is becoming.