With mobile wallets expected to comprise more than $25 trillion in global transaction value by 2027—corresponding to 49% of all e-commerce and POS sales — the world of digital payments continues to evolve rapidly, and this is being seen more now, especially with developments from global technology providers, like Apple.
Recently, Apple announced that it would open its NFC (Near Field Communication) capabilities to third-party wallets following a ruling by the European Commission2. This significant move signals a shift in the mobile payments landscape, offering opportunities for financial institutions (FIs) to innovate and compete in a rapidly transforming market.
Currently, Big Tech and fintech firms are redefining the digital wallet space with stellar consumer experiences, placing pressure on traditional banks and financial institutions to invest in innovation—or risk falling behind. In particular, there is a growing demand for mobile banking apps with embedded contactless payment capabilities, pushing FIs to stay ahead of the curve.
As digital payments become more integrated into daily life, financial institutions must rethink their approach to ensure they remain at the center of customers1 digital experiences. This is a clear call for them to remain competitive by offering secure, flexible and innovative digital solutions. FIs that fail to adapt risk losing their position as trusted liaisons in customers’ financial lives.
The new role of financial institutions in the digital payment landscape
As customers demand more personalized, convenient and tech-driven experiences, the role of traditional banks is expanding.
Today’s customers expect more than secure transactions—they want lifestyle-driven services that enhance their financial and digital well-being. Financial institutions are uniquely positioned to meet these expectations by offering features like eco-conscious banking, digital asset investments and personalized payment solutions within their digital wallets.
The average customer interacts with their bank at least twice a day for payment-related matters, with payment processes representing more than 80% of customer interactions with banks3. This makes payments a strategic area for FIs to not only strengthen customer engagement but also to offer additional services that can drive value. By capitalizing on these frequent touchpoints, FIs can further embed themselves in their customers' daily financial routines.
Digital wallets are no longer just an alternative to their physical counterparts. They are becoming an integral part of customers’ financial ecosystems, offering features such as control over payment methods, financial management tools and personalized insights that help FIs strengthen customer relationships. By embedding themselves into the everyday digital lives of consumers, FIs can ensure that they remain central to financial interactions.
Remaining at the center of customers’ digital lives
In this era of digital banking, financial institutions must go beyond basic banking services. The future belongs to banks that can offer value-added solutions designed to meet customers’ evolving needs. From carbon footprint tracking and digital asset management to tailored spending insights, offering these tailored services is one way to provide a more holistic banking experience.
Financial institutions should also focus on creating user-friendly mobile wallet experiences that are accessible to everyone. With customers spanning multiple generations—from tech-savvy Gen Z to senior citizens—banks need to ensure that their digital solutions are easy to navigate, inclusive and seamless. Simple interfaces and secure authentication processes will go a long way in providing convenience without sacrificing security.
Additionally, conscious consumerism is growing, and customers increasingly expect financial services to reflect their values. Banks that offer tools to align spending with sustainability goals, such as carbon offset programs, will build deeper, more loyal relationships with their customers. These tools not only enhance customer satisfaction but also strengthen long-term engagement by connecting personal values with financial behaviors.
As mobile commerce continues to rise, banks can further enhance their relevance by simplifying mobile payment experiences. One-click checkouts and push provisioning for cards and accounts make mobile transactions effortless and convenient, ensuring the bank remains at the forefront of customers' payment choices.
Balancing security with convenience
As digital payments grow, so do concerns around security. Customers expect seamless, convenient transactions and access to banking services, but they also demand robust protection for their data. Financial institutions must adopt a risk-based approach to security, providing smooth authentication for low-risk transactions while applying stronger safeguards for high-value ones.
Contextual authentication, which considers a user’s typical behavior and transaction patterns, enhances both security and convenience. This technology can allow banks to offer a frictionless banking experience that gives customers peace of mind, knowing their mobile transactions are secure without being cumbersome.
G+D’s role in supporting financial institutions
Giesecke+Devrient (G+D) is at the forefront of securing the future of payments with a comprehensive suite of digital payment solutions, serving a wide range of use cases that enhance both security and customer experience in the rapidly evolving financial landscape.
G+D’s solutions allow financial institutions to offer seamless mobile payments by integrating tokenization services, enabling users to make secure contactless payments via their smartphones. The scalable wallet functionalities provide banks with the ability to meet customer demands for easy, digital-first payment methods, offering flexibility and convenience. In support of the digital-first economy, G+D offers solutions that streamline card issuance, allowing customers to immediately activate and use a digital version of their card while awaiting physical delivery. This offers banks a competitive advantage by accelerating the user onboarding process and driving customer satisfaction.
Furthermore, Consumers are increasingly worried about understanding their decisions' impact on the environment and making more sustainable choices. This is especially true for their payments.
G+D’s commitment to sustainability is reflected in its efforts to promote environmentally conscious payment solutions, supporting sustainable practices within the industry. G+D continues to shape the future of payments and making financial services more accessible by continuing to innovate secure and inclusive payment solutions leaving no one behind.
A new era of digital payments for financial institutions
The future of digital payments is about more than just technology—it’s about financial institutions staying at the heart of customers’ digital lives. FIs that invest in secure, innovative and personalized digital wallet solutions will continue to lead the way in offering the experiences customers expect.
Financial institutions have a unique opportunity to lead in the evolving digital banking space. By embracing innovations and focusing on customer-centric, value-added solutions, they can remain at the forefront of the digital payments revolution. The future is bright for FIs willing to adapt, and with the right partners like G+D, they can confidently navigate this transformation.
https://corporate.worldpay.com/news-releases/news-release-details/worldpay-global-payments-report-2024-digital-wallet-maturity
Developers can soon offer in-app NFC transactions using the Secure Element - Apple
https://www.ey.com/en_iq/financial-services-emeia/how-traditional-banks-can-make-the-most-of-consumer-trust
