{"id":334395,"date":"2026-03-07T21:33:24","date_gmt":"2026-03-07T21:33:24","guid":{"rendered":"https:\/\/www.newsbeep.com\/ie\/334395\/"},"modified":"2026-03-07T21:33:24","modified_gmt":"2026-03-07T21:33:24","slug":"thales-says-digital-wallets-enter-a-fight-for-control-and-margins","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/ie\/334395\/","title":{"rendered":"Thales Says Digital Wallets Enter a Fight for Control and Margins"},"content":{"rendered":"

The modern digital wallet<\/a> has become so ubiquitous that its absence now feels unusual.<\/p>\n

A commuter tapping a phone to board a train or pay for coffee rarely pauses to consider the layered infrastructure behind that gesture. Yet beneath this familiar motion, structural shifts are reshaping how digital wallets compete and how issuers and platform providers shape their own strategies.<\/p>\n

Michael Doron<\/a>, North American strategic director for digital at Thales<\/a>, told PYMNTS that the United States wallet landscape is entering a distinct phase. While Apple Pay<\/a> and Google Pay<\/a> remain dominant, the market is evolving. The focus has moved toward control, economics and differentiation.<\/p>\n

A Market Moving Beyond Presence<\/p>\n

For years, wallet adoption in the U.S. progressed at a measured pace. Consumers gradually migrated from plastic cards to digital credentials stored on mobile devices<\/a>. The value proposition was to replicate the physical wallet within the phone while preserving security and convenience.<\/p>\n

However, with interest intensifying among U.S. players that is partly driven by regulatory and competitive signals emerging abroad, Doron suggested that a measured pace is no longer viable. In July 2024, the European Commission<\/a> reached an agreement requiring Apple<\/a> to open its tap-and-go NFC payment technology<\/a> to third-party providers across Europe. The decision expanded technological access and lowered barriers for new entrants.<\/p>\n

Advertisement: Scroll to Continue<\/p>\n

The immediate result was a surge of wallet experimentation. Doron pointed to early European launches from global eCommerce wallet providers, buy now, pay later (BNPL) providers, and FinTech firms. The momentum extended beyond Europe.<\/p>\n

\u201cThe success really showed that a third-party wallet provider can drive user adoption,\u201d Doron said, referencing Vipps\u2019 Norwegian wallet launch, the world\u2019s first Apple Pay-like wallet in iOS, enabled by Thales. \u201cWithin the first 24 hours of launch, 200,000 digital cards were activated, and the majority of that was on iOS.\u201d<\/p>\n

Although the regulatory environment differs, Doron said U.S. firms are closely studying these developments, assessing whether similar competitive openings may emerge domestically.<\/p>\n

Understanding the First Wave<\/p>\n

To understand what is changing, Doron distinguished between the first generation of wallets and the current wave.<\/p>\n

The earliest wallets pursued two core objectives. First, digitize the contents of the physical wallet by enabling multiple issuers\u2019 cards within a single interface. Second, deliver a frictionless experience that matched or exceeded traditional card payments, in-store and online.<\/p>\n

\u201cThese two elements were really critical to early wallet adoption,\u201d Doron said.<\/p>\n

In this phase, success largely depended on scale and reliability. Wallets functioned primarily as containers for existing payment instruments. Differentiation was limited, and consumer incentives centered on convenience.<\/p>\n

Why the Next Phase Looks Different<\/p>\n

The emerging generation of wallets reflects a more varied set of ambitions. While the technological foundation remains similar, provider motivations have broadened, Doron said.<\/p>\n

\u201cThey want to increase margins, and they want to own and control the customer journey,\u201d he said.<\/p>\n

The shift reframes wallets from passive storage tools into strategic control points. Providers increasingly view wallets as mechanisms for deepening customer engagement, shaping transaction flows, and capturing economic value previously distributed across multiple intermediaries.<\/p>\n

BNPL firms illustrate this evolution. By issuing proprietary cards within their wallets, these providers gain greater influence over user behavior and revenue streams. Such models are not designed as multi-issuer wallets, Doron said. Instead, their value stems from gaining payments on their cards through the use of incentives, offers or financing features.<\/p>\n

\u201c[In] reality, the players most likely to succeed are those with either a large user base or a large national brand,\u201d Doron said.<\/p>\n

Issuer Strategy Under New Conditions<\/p>\n

For issuers, the implications are less about technology and more about strategic clarity. Mere enablement within dominant wallets no longer guarantees meaningful engagement, Doron said.<\/p>\n

\u201cPresence alone is not enough,\u201d he said.<\/p>\n

Issuers evaluating proprietary wallets face a central question: Why would an existing Apple Pay or Google Pay user switch?<\/p>\n

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Doron\u2019s answer: An issuer wallet may make sense when it supports a captive ecosystem, delivers closed-loop benefits, or bundles value-added services that cannot be replicated elsewhere.<\/p>\n

\u201cSuccess comes down to incentives and value, not technology,\u201d Doron said.<\/p>\n

Absent a clear customer proposition, wallet development risks becoming an expensive diversion rather than a growth lever.<\/p>\n

European Lessons Without Direct Replication<\/p>\n

Although European developments provide useful reference points, Doron cautioned against direct imitation. Market structures, device economics and platform access vary.<\/p>\n

One distinction involves host card emulation (HCE), a software-based approach that simplifies wallet deployment. Doron said HCE is broadly available across iOS and Android in Europe, reducing launch complexity.<\/p>\n

In the U.S., the picture is more fragmented. Google<\/a> and Samsung<\/a> support HCE at no cost, while Apple relies on the iPhone\u2019s embedded secure element. Access to this hardware-based model is not yet broadly available and is expected to involve fees, Doron said.<\/p>\n

Compounding this challenge is smartphone market share. With more than half of U.S. users on iPhone, Doron said Android-only wallet strategies are unlikely to achieve meaningful scale.<\/p>\n

The Strategic Role of Partnerships<\/p>\n

Across both regions, Doron said successful wallet launches rarely occur in isolation.<\/p>\n

\u201cNone of the wallet providers that launched in Europe went at it alone,\u201d he said.<\/p>\n

Instead, providers partnered with established technology and infrastructure specialists, such as Thales, enabling faster deployment while preserving performance and security standards.<\/p>\n

Even large technology firms opted for collaboration rather than building every component internally, Doron said. Partnerships<\/a> allowed wallet providers to concentrate on customer-facing value rather than back-end complexity.<\/p>\n

A Market Defined by Value<\/p>\n

As digital wallets evolve, Doron\u2019s analysis pointed toward a competitive advantage that depends less on the wallet construct itself and more on the tangible benefits delivered to users.<\/p>\n

\u201cIt\u2019s not simply about copying strategies,\u201d Doron said. \u201cIt\u2019s about understanding your specific market dynamics.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"The modern digital wallet has become so ubiquitous that its absence now feels unusual. A commuter tapping a…\n","protected":false},"author":2,"featured_media":334396,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[16],"tags":[14256,226,61,60,202,58619,43,1896,179,15787,80,128285,644],"class_list":{"0":"post-334395","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-mobile","8":"tag-digital-wallets","9":"tag-featured-news","10":"tag-ie","11":"tag-ireland","12":"tag-mobile","13":"tag-mobile-wallets","14":"tag-news","15":"tag-partnerships","16":"tag-pymnts-news","17":"tag-pymnts-tv","18":"tag-technology","19":"tag-thales","20":"tag-video"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts\/334395","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/comments?post=334395"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts\/334395\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/media\/334396"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/media?parent=334395"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/categories?post=334395"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/tags?post=334395"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}