Account-Based Digital Wallets: Navigating the Future of Payments
Tim Richards (Nordea), Marina Repo (IN Groupe) & Kristian T. Sørensen (DNB)
Account-based digital wallets integrate verified credentials, digitized assets, and identity management, building on open banking and NFC access to enable seamless, thin payment interfaces while expanding into hybrid platforms offering invoices, loyalty, and P2P functions. Local wallets like VIPPS provide value-added services such as parental controls and bill splitting, emphasizing trust through bank-backed schemes. The European digital identity wallet complements payments by centralizing sensitive data access, supporting interoperability and enhancing payment sovereignty and resilience amidst fragmentation of European instant payment solutions and offline challenges.
"Wallets are becoming platforms for consumers' daily lives, integrating payments, identity, and value-added services. Trust and interoperability at the account level, centered on the bank, will drive the future for seamless, secure digital interactions."
Summary
- Mobiform released a detailed white paper on account-based digital wallets covering wallets as interfaces for managing verified credentials and digitized assets. - Payment wallets today are "thin", seamless interfaces focused on transactions, while account-based digital wallets support more complex functionalities. - Banks remain central to trust by keeping accounts as the core, with wallets providing different seamless ways to access and pay from those accounts. - NFC access and interoperability improvements like Apple's NFC opening support wider wallet use cases but control points remain with traditional payment schemes. - Local wallets add value by incorporating features like parental controls, loyalty, and bill splitting, offering competitive localized payment experiences beyond global tech wallets.
Article
Banking's digital frontier: How account-based wallets are reshaping European payments
At this year's Nordic Fintech Summit, industry experts offered a compelling vision of how digital wallets are evolving beyond simple payment tools into comprehensive financial platforms that could transform how Europeans access and manage their money.
Beyond payment: The wallet as a financial platform
The Nordic Fintech Summit saw Tim Richards from Nordea, Marina Repo from IN Groupe, and Kristian T. Sørensen from DNB presenting their insights on account-based digital wallets, drawing on research published by Mobiform, an industry association dedicated to cutting-edge financial technology.
"Digital wallets are an interface to interact with verified credentials and digitized assets, allowing control over monetary assets and identities alike," Sørensen explained during the presentation, highlighting how today's digital wallet concept has expanded far beyond its initial scope.
The speakers outlined how modern wallets are becoming hybrid platforms, incorporating not just payment capabilities but increasingly diverse functionalities including invoices, recurring payments, loyalty programs, and specialized features like bill splitting.
Local innovation driving competition
One of the most significant developments highlighted at the summit was how local payment solutions are evolving in response to recent market changes.
"Local wallets are becoming financial platforms for the consumer's daily lives," Repo noted. "You're seeing them geared up with features like invoices, recurring payments, split-the-bill functions, and loyalty programs, becoming essential daily-use tools on mobile phones."
The presenters pointed to the opening of Apple's NFC capabilities in Europe as a catalyst for growth among regional wallet providers. This technological shift has enabled local solutions like VIPPS Mobile Pay to expand their capabilities, introducing features such as tap-to-pay functionality that had previously been limited to global tech wallets.
Trust remains central to success
Despite technological advances, the speakers emphasized that consumer trust continues to be the foundation of successful payment solutions.
"Trust remains central: people rely on banks and schemes behind payment methods, so local champions and banks maintaining that relationship is crucial for wallet adoption," one of the speakers remarked during the session.
Sørensen illustrated this with a telling example: "Even though we all pay with our mobile phones using big tech wallets, is that really a vote of confidence? I don't think so. We do it because we know that if something goes wrong with the Visa or Mastercard we're using, we can contact our bank."
The bank account as anchor
Rather than seeing bank accounts diminished by these new payment technologies, the presenters argued that accounts remain fundamental to the ecosystem.
"The real power of account-based payments is in simplifying the transaction flow, removing layers of indirection to provide a straightforward bank account interface," Sørensen explained, emphasizing how these new payment methods ultimately connect back to traditional banking infrastructure.
Richards elaborated on how banks can leverage these changes: "We should focus as incumbents on what we do best. That is having a very good mobile banking app, providing good digital experiences, and building this control tower to give customers insight."
European identity wallet: Complementary not competitive
The upcoming European digital identity wallet was discussed as a complementary development rather than a competing payment solution.
"I don't think it will be a payment wallet initially," Sørensen noted. "Instead of having payment-centric wallets, we are probably going to have more identity-centric wallets, but still with the account at the core – not just where you store your money, but where you store all of your sensitive data."
Payment sovereignty and resilience
The summit conversation concluded with reflections on European payment sovereignty and system resilience – particularly relevant given recent infrastructure failures across the continent.
The speakers noted that while local and regional payment solutions are increasing interoperability, significant challenges remain in establishing universal acceptance across Europe. Cross-border payments were identified as an area with substantial untapped potential for improvement.
As Europeans increasingly rely on digital payments, the experts at Nordic Fintech Summit made clear that the evolution of account-based digital wallets represents not just a technological shift, but a fundamental reimagining of how financial services integrate into daily life.
Part of Nordic Fintech Summit