Wearables security


to play a part in the next incarnation of the digital wallet. PayPal has already launched its ‘Pay in 3’ credit offering, and Apple has well-publicised its plans to launch Apple Pay Later ‘soon’. BNPL brand Klarna is leading the pack, having unveiled a super app that consolidates shopping, payment management, product delivery, and product returns. It is likely that this trend will only grow as the implementation


of embedded finance increases – across the UK, Germany and Belgium alone, 75% of retailers are already using it to offer financial products such as card, BNPL, and loyalty incentives. Looking further ahead, I believe the next step for the financial


super app will be to leverage artificial intelligence (AI) and elevate these platforms from tools that hold money to AI-powered financial assistants that help users make smart decisions.


Crypto wallets to boost crypto security As of August 2022, the number of crypto wallet users reached more than 84 million worldwide, up from around 76 million users the previous year, and the global crypto wallet market size was valued at USD 8.42 billion. It’s expected to expand even further at a compound annual growth rate (CAGR) of 24.8% from 2023 to 2030. Tat being said, following news that Trezor crypto wallets have fallen victim to phishing attacks, it’s clear there are still security hurdles facing this tech. Dealing in cryptocurrency is not without risk. Apart from


closely monitoring the price volatility, technical complexity and governance, keeping the private keys safe and protecting them from scams and hackers is vital in cryptocurrency trading. For now at least, a hardware wallet device is the most secure option. Unlike digital wallets, which are connected to the internet and vulnerable to hacking, these hold private keys in a secure physical device disconnected from the internet. But crypto wallets are constantly evolving regarding their


security features and technology, creating a growth opportunity in the market. Soſtware wallets are already protected with cybersecurity measures like two-factor authentication and cryptography which make it difficult for hackers, and here again, AI is being utilised. Coinbase recently carried out an AI experiment to find out


how accurately ChatGPT could carry out a token security review - a requirement for all tokens listed on the exchange. It wasn’t a complete success, with the AI sometimes producing inconsistent results, but the Coinbase team is optimistic they can increase the accuracy of ChatGPT to a point where it could be used as a secondary quality assurance check.


A missed opportunity for big banks As digital wallets continue to grow in popularity, it was only a matter of time before big banks decided to jump on the bandwagon. Some big names, including Wells Fargo, US Bank and PNC, have started to develop their own digital wallets to ‘address long-standing payment problems in e-commerce’. But given that the likes of Apple Pay and Google Pay have been around for years, they could face an uphill battle. Aside from the competitive landscape they’re now entering,


digital wallet users are not the loyal customer base that bricks- and-mortar banks are used to – users of one digital wallet are very likely to use others as well. For example, 88% of Apple Pay users say they also use PayPal. Traditional banks may well see digital wallet launches as a


necessary step to stay relevant. However, whether they are able to offer the true functionality, flexibility and innovation that neo-banks offer to persuade customers to abandon their existing wallets remains to be seen. With so many already embracing digital wallets as a convenient,


fast, and secure payment method, it’s not beyond the realm of possibility that they could replace cards and cash altogether. But while they continue to co-exist with their traditional counterparts, PPS is excited to be at the forefront of the innovations driving the evolution of the digital wallet.


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May 2023 | 41


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