Digital wallets are a cash-free way to pay and store useful information, similar to the way you might have stored your vaccine pass on your phone, but much more capable. Digital wallets like WeChat Pay have made huge strides in countries which still rely on cash, but here in Aotearoa we’re already an almost cashless society. Being able to pay digitally isn’t on its own going to make much of a change in the life of Kiwis, but some of the other features of digital wallets will.
What would a Kiwi digital wallet look like?
Digital wallets are the future of payments – but they’re also so much more. They’re going to put your old leather wallet out of a job. They will save time for shoppers and retailers: no more loyalty cards, no coffee punch card, no driver’s license, no library card. Everything can be sorted out with a single transaction, without retailers needing to buy or install any additional hardware, and, for safety and security purposes, it’s best for shoppers if the wallet is integrated with existing banking apps or other trustworthy service providers.
Here at Worldline, we’re developing an all-inclusive digital wallet app with a New Zealand-centred approach. The wallet will help Kiwis to do more with less. Individuals will have more control over their own information and who they share it with, it will reduce the number of cards they need to carry, and we will be ensuring the digital wallet will be able to store and use digital currencies. We want merchants to be able to process transactions more cost-effectively and seamlessly without being shackled to the international Big Tech brands like Apple, Google, Mastercard or Visa. And we want it to happen now.
Contactless debit with lower fees
Another major advantage would be the ability to make contactless debit payments, without needing to go through a major credit card brand. It would effectively be like having contactless EFTPOS – low fees for merchants, high convenience for shoppers.
Currently we have contactless debit via credit card company’s debit cards. However, at Worldline we have been innovating ways to process debit payments without needing Visa or Mastercard. We are piloting a local New Zealand contactless card. It works with all Worldline connected terminals, and it would allow our issuing clients to create their own contactless branded payment cards.
Once we have a local and contactless way to pay for items that uses money direct from your bank account, we can transfer that to digital wallets. It would allow shoppers to tap their phones on terminals to pay contactlessly without needing a Visa or Mastercard product, and it should reduce or eliminate the surcharging.
A digital wallet protects your information
Moving information online, rather than physically keeping cards in your wallet, does make some people nervous. There’s always a concern about privacy when your personal data is stored online.
But a digital wallet provides far less information than a physical wallet. For example, when you buy alcohol, a merchant can send a query to your digital wallet that essentially asks: ‘Is this person aged 18 or over?’ You grant permission for your digital wallet to provide a ‘Yes’ or ‘No’ answer. That’s all the information that the merchant gets. Compare that to handing over your driver’s license, which shows them your exact date of birth, your photo and probably your address. Plus, you can’t leave your digital wallet in an Uber where anybody can pick it up and open it. Access to your digital wallet is protected by several layers of authentication via your phone and banking apps.
Similarly, instead of conducting a credit check when you want to finance a new car, your digital wallet could ask the question, ‘Is this person’s credit score above 500?’ Once again, your digital wallet – if you give it permission – will ‘reply’ with a yes or a no. The same would apply if the merchant asked, ‘Is this person’s address verified?’ A yes or no answer is much less invasive than a credit check or a proof of address.
We need to move now
The right digital wallet will need to be tailored to New Zealanders, and we have a small window of opportunity to take the lead on this. We need to move quickly to create our own digital wallet, otherwise Big Tech giants, like Apple, will bring one to market that may not fit our needs, may not sufficiently protect our people or it creates an extra cost burden for everyone.
Digital wallets aren’t just the future of payments. They’re the future of identification, loyalty schemes, age verification, digital New Zealand dollars – and more, so watch this space!