So everday I am in awe !
Like almost everybody I know or meet up with in London, I carry with me at least one piece of plastic with an embedded chip for the sole purpose of buying something without handing over any cash at all. Data from Barclays, (which sees nearly half of the UK’s debit and credit card spending), reveals that I am not alone and a record 91.2 per cent of all eligible card transactions in the UK were made using contactless payments last year.
OK, that’s some technology uptake. – Or is it??
Actually, I do not think that it is “technology uptake” at all. It really is a “convenience uptake”! Would this reaction be the same if life would have become harder by using contactless payment cards? I really do not think so. – And that’s the issue. For a really successful uptake of new technology there has to be a shift in convenience, or a shift in circumstance that necessitates the change.
So can this requirement be applied to Digital Wallets?
There is no doubt in my mind that Digital Wallets, in the broadest sense, are really exciting.
I see a revolutionary world of opportunity, where interactions between persons (whether natural, legal, or automated) can be conducted through pre-determined workflows (dApps) using verifiable credentials, cash transfers and other tokens.
I am also reminded, in extremis, of Isaac Asimov’s famous science fiction novel “The Naked Sun” [1] where on a planet Solaria, physical contact is considered a taboo, and all interactions are conducted remotely.
Back in the 21st Century, digital wallets, (either self-sovereign or Type 2) can carry all the components and credentials required to transact with others digitally. Driven by multilateral workflows, one could carry out any group interaction.
A future 'extreme' digital wallet use case could be:
A charitable crowdfunded activity where a minimum number of residents of a certain geographic area exclusively might wish to donate money for a children’s playground in a park. A local government contribution could have also been negotiated to match local donors’ contributions, and of course there are central government tax rebates for personal charitable donations.
So a workflow (dApp) could be set up so that a transaction would only permit anonymous donors with verified residency in the area to contribute to the endeavour. Only when the predetermined donations total from donors have been received (or held in escrow), could the order be placed with the supplier. Once that order is fulfilled and delivered, as confirmed by a verifiable digital supply certificate, would the local government release their contribution to the supplier. This is all automated, with the donors receiving a digital ‘donation thank you’ to offset against their own tax liabilities.
Here we have relying parties consisting of: citizens, local government, product suppliers, tax authorities, and banks. Verifiable credentials would include; proof of residency, tax identification, product order, delivery/compliance certificate, bank account order etc – all within the same workflow. The product supply order is particularly interesting as it could be self-generated by the supplier conditional on receiving payments (from an escrow account) by a bank on behalf of the citizens. The purchases would in fact be carried out by a ‘virtual entity’ consisting of those donors that contributed.
This would be a truly collective expression of will – How cool is that?
Within the workflow could be a legal entity underwriting the whole action and taking a small percentage of the donations. The off-the-shelf, customised workflow (dApp) could also be charged for.
Are you beginning to see why I am so excited?
The question is whether people really want or need this type of flexibility? Does this really reflect life’s level of complexity? This flexibility could actually be driven by SMEs wishing to increase market penetration: "Buy from us - it's easy" is always a good selling point in a complex purchase situation like with restricted goods.
One way for an effective market introduction may be to implement it gradually. Being clearer, as Type 1 digital wallet functionality is much closer to the current way of interacting than Type 2, this could be introduced without too much trauma for citizens or relying parties. Once usage is increased, then additional functionality can be introduced. This would effectively become Type 2. However, because this should be presented as a marginal increase in functionality, the change from Type 1 to Type 2 should be transparent.
The banks may even have the right idea! – They could be supporting SMEs too.
However, this does mean thinking ahead and investing in the technology beforehand.
Does it look like Identity is back in the hands of the banks - yet again?
Whatever route is taken, there are a few more boxes and functions needed in the Architecture Reference Framework from the European Commission [2]…….