an article written by David Birch, International keynote speaker, author, advisor, commentator and investor digital financial services.
Last year, Apple announced that any third-party wallet can now build on Apple’s Near Field Communication (NFC) and Secure Element (SE) architecture. As my good friend and respected commentator Tom Noyes immediately pointed out, this is no “spur of the moment announcement”
and Apple must have been working on this for some time given this is a really significant strategic change.
The New Ecosystem
It is huge for the payments and identity ecosystems: the SE (Secure Element) is tamper-resistant hardware, the same kind as your mobile phone’s SIM and your chip and PIN cards, and developers will use it to manage the cryptographic keys that power our online lives.
Opening up the ecosystem around the convenient contactless interface and the security of the tamper resistant hardware means that developers finally have the opportunity to compete with the Apple wallet. As Apple themselves point out, using the new NFC and SE APIs, developers will be able to offer in-app contactless transactions for “in-store payments, car keys, closed-loop transit, corporate badges, student IDs, home keys, hotel keys, merchant loyalty and rewards cards, and event tickets, with government IDs to be supported in the future”.
In my view, this is good for the ecosystem as a whole but it is also good for Apple. Apple needs competition as a spur to improvement just as the rest of us do. It may well be the case that Apple’s proven expertise in convenience and ease of use will mean that consumers will continue to prefer the Apple wallet in all cases, but there is plenty of room for competition.
Here’s what I mean. I am a huge Apple fan, have an all-Apple ecosystem in place both at home and at work. That does not mean I use Apple solutions for everything! I use Outlook for my work e-mail despite the fact that I have Apple Mail. I still use iMessage to send the occasional text message but 99% of my messaging is not Apple. When it comes to messaging, I use WhatsApp for family and friends and Signal for a lot of business messaging (many people who work on secure projects simply don’t trust Meta and insist on Signal rather than WhatsApp). In fact pretty much everyone I know is in a WhatsApp family group and a bunch of WhatsApp friends groups. I have one for organising Dungeon and Dragons games, for example!
When I was walking around the streets of Wellington, New Zealand recently, I was using Google Maps to navigate to a conference venue even though I have Apple Maps on my phone. When I am driving in my car, I have Apple Maps in CarPlay but I generally use Waze. When I am writing, to take another immediate example, I tend to dictate directly into ChatGPT (which is what I am doing know) because it is pretty good at not only taking the dictation but the styling of what I am saying, and then I take the output from that to use as the input to the article or report or blog post or whatever it is I am actually working on.
Hence my fundamental prediction that the new ecosystem will have more of an impact in the world of identity than in the world of payments because the ability to use secure elements in both Android and Apple applications means that developers can bring into existence the kind of digital public infrastructure (DPI) that has long been needed in the US and elsewhere (eg, the UK).
Apple has said that they will not charge governments for access to the ecosystem, although they will obviously (and quite reasonably) charge for commercial access. This will immediately mean that digital driving licenses and passports and all other kinds of official documents, permissions and credentials will find their way into wallets.
What Is In Your Wallet
The point is that while I remain a steadfast purchaser of Apple devices, apps, and services, I do not find myself reliant solely on Apple’s ecosystem. Numerous third-party providers deliver distinctive functionalities, innovative methods to accomplish tasks, and creative solutions that enhance my work, leisure, and overall digital experience, often surpassing Apple’s own offerings. I anticipate a similar dynamic will unfold with the Apple Wallet, as alternative providers will inevitably present competitive, and perhaps superior, options.
Wallets are about much more than payments though. If you look in my wallet right now, you won’t find cash of any description, but you will find my driving licence, payment cards, loyalty cards (eg, Waitrose), membership cards (eg, the AA) and a season ticket for Woking Football Club. These are all about identity. And they are all much better implemented as verifiable credentials than as pictures of the physical objects stored in my iPhone library (which is what they are now). I don’t doubt that the developers of pilot projects for the European Digital ID Wallet are already gathered around their whiteboards planning a new future of enhanced convenience and security.
Commercial Opportunities
There are some great commercial opportunities here. For example,, I think it is quite easy to imagine that there will be some kind of Ticketmaster wallet that will be developed in the ecosystem so that tickets to concerts and sporting events become NFTs that cannot be lost, stolen or counterfeited because they are stored in wallets that have the private key in the secure element. Jamie Smith💡‘s contention that the digital wallet will become the key channel between customers and brands — more trusted than SMS, less spammy than e-mail, more portable than an app — is looking more accurate than ever.
I might keep my Apple wallet as the default for when I tap and go at the store, but that doesn’t mean it would be the only wallet that I use.
Banking 4.0 – „how was the experience for you”
„So many people are coming here to Bucharest, people that I see and interact on linkedin and now I get the change to meet them in person. It was like being to the Football World Cup but this was the World Cup on linkedin in payments and open banking.”
Many more interesting quotes in the video below:
