Digital Wallets: Digital Payments will be a 3–4 trillion euro market by 2020, as the world is running to get their bite of the payment cake, including Apple, Microsoft, Facebook, and many other big players. So manufacturers need to ensure very high security for users to gain their trust and secure their transactions with secure element chips. The architecture of the secure element chip should be designed to be hardened against attacks on the phone.

Drive Against Cash

Drive against cash, or is it a case against cash? In full swing across the globe and specifically India, which is on a trajectory perhaps bigger than World War II (just guessing). This effort is welcomed in the need of the hour, but definitely not at the speed of light. The security of subscriber’s data in terms of KYC information, transaction details, and sensitive information like bank, mobile wallet, and card details is pivotal and the key to any financial system.

Prior to embarking on our journey and asking customers to use any financial system or platform that offers user interfaces such as mobile apps, online interfaces, or mobile phone interfaces, a serious need exists to understand what security has been built on and which tools, systems, software, and techniques are used to ensure protection.

Prior to using a cashless payment instrument, the user requires a basic level of understanding and trust in the system. When it comes to running an online business, the most important question is, “How will my customers pay me?” If you are unable to answer that question, then you may as well close shop and go home.

Digital Wallets and Security

If you are excited and passionate about using your digital wallet with any of the wallet service providers in India or elsewhere across the globe, then this is important. Your digital wallet, or eMoney wallet, is vulnerable to cyber-attacks and hackers who are able to escape with your sensitive financial information stored in your digital wallet.

As payment technologies progress, so will the need for secure and safe methods for our day-to-day payments. Due to the pressure of accepting this new manner of banking, banks may feel they need to decide between complying, competing, or refusing and losing out as a result as FinTech explores new technologies that meet the challenges of digitalization and changing consumer behavior every day.


Personally, I am paranoid about security and will never use any method that is not secured. A strong payment gateway will provide the merchant with a wide array of payment options so that no transaction is lost because the customer does not have a suitable payment option.

AI-based Hardware for Digital Wallet Systems

What if regulations come out to enforce a strong artificial intelligence-based hardware security layer along with software? This will decrease the opportunity for hacking. Adding machine learning algorithms to detect velocity and pattern would ensure it gets safer.

In the case of any digital wallet, security checks are key. Global wallet companies like Alipay, WeChat, and Apple Pay use a hardware-based security layer, which makes them more secure for online transactions. “You will be surprised because most of the banking or wallet apps around the world don’t use hardware security, which is difficult to digest or understand why.

They actually run completely in open software mode, and users passwords can be stolen with ease. Having said that, I don’t mean to claim that if hardware-level security is not built in, the wallet is not secured or should not be used; all that matters is what level of transaction volumes, numbers, and values we process to ensure cost effectiveness comes into play. For this to happen effectively, planning and preparation are key to the next stage of the payments revolution.

Information and Data Storage

A key issue for consumers engaging in mobile commerce and payment transactions is information disclosure. The technological constraints of mobile devices, including small screen sizes and limited memory or storage capacity, can limit the amount of information that consumers have access to during a transaction. A small screen, for example, limits the amount of text that can be displayed to a consumer. Today, smartphones are the driving force behind a lot of innovation and changing consumer habits.

For example, they are playing an increasingly important role in contactless payments, which are booming around the world. In the UK, the amount spent by shoppers using contactless payments soared by 166% in 2016, with half of Brits now using contactless payments at least once a month.

A memorable African proverb, “If you want to go fast, go alone, but if you want to go far, go together,” keeps coming back to mind. Financial institutions need to be innovative and keep up with the speed of digitalization while continuing to be stable and resilient.

At the same time, if we think that there is too much technology and too little expectation, then wait for virtual reality. By 2020, according to the study conducted by the Analysis Group and commissioned by Facebook, $14.6 billion in revenue is due to come from virtual reality-based technology.

This information is based on the number of people who have not adopted something compared to others. The amount of money could be really big—up to $126 billion. This is because none of the money goes to FinTech or banks. Technology has improved and will continue to improve without stopping. When I was younger, if I saw a child picking their nose, I would make fun of them, like they had found something valuable.

Similarly, American insurance companies are coming up with insurance technology, or insurtech, based on this childhood joke, basing business cases on the same concept, offering dental insurance and mouth insurance based on data taken from toothbrush tracking. Security and privacy are gone if security does not match speed and pace.

Good Technology – Bad Privacy

In the start of the post, I mentioned that technology is good and will happen without a doubt, but other critical factors should also come along, not only technology.

lawn care business cash flow statementConsumer expectations, i.e., faster payments with real-time insights as a result of faster payments, an increasing competition where the partnership is a huge step in helping them to ease it out and better manage it, and generating new revenue streams are at the heart of technology. It is incredible to note and see how quickly new technologies change consumer habits and expectations, which in turn help to improve quality of life.

When the ATMs were starting, they pointed out the 24X7 era of service to access cash at any time, but what it really changed was consumer expectations around service availability, not just cash.

As payment technologies evolve too fast, so should the way we pay. Now consumers expect everything to be instant, which means being able to send money to friends or set up regular payments knowing it will be an instantaneous and simple process. Payment is basically a networking solution of choice for consumers across networks, which converts their tangible item into a conceptual item.

Consumer payments have empowered telcos, cloud solution providers, and FinTech for each use case of payments. Consumer payments other than cash need to be provided with the best feature set and the highest performance systems.

As a condition of the security policy regulatory framework to support fiscal responsibility, providers compliance departments must ensure that sufficient funds are maintained and set aside for initial and ongoing data security compliance responsibilities to protect consumers and other confidential information stored, processed, or transmitted to support fiscal transactions, including the collection of payments.

Making the customer central in the digital banking journey and humanizing the digital experience while protecting consumers confidential information, which is stored, processed, and transmitted to fiscal transactions, including the collection of payments, should appear super easy.

We should take another look at the study on creating a bank that only lets you use your phone. We should think about it in a different way. A way to measure new technology use in banks needs to be found to find better ways for people to make payments without traditional bank accounts.

One of the biggest concerns relating to security in e-commerce applications is the use of the correct, reliable, and secure payment method, i.e., the card, Internet banking, mobile payments, or instant payments. Failure to secure sensitive information can cause major damage to the service provider’s organization in terms of financial fraud, identity theft, legal regulations, loss of consumer confidence, etc. Security controls that can be employed to make a payment handling application more robust and frustrate breakers at the hardware level before reaching the application level

Points to Note:

All credits, if any, remain with the original contributor only. We have covered all the basics around mobile payment security and the importance of mobile payment data. In the next upcoming post, we will talk about implementation, usage, and practice experience for markets.

Books + Other readings Referred

  • Research through the open internet, news portals, white papers, notes made at knowledge sharing sessions, and live conferences and lectures
  • Lab and hands-on experience of  @AILabPage (Self-taught learners group) members.

Feedback & Further Question

Do you have any questions about AI, machine learning, data billing and charging, data science, or big data analytics? Leave a question in the comment section or ask via email. I will try my best to answer it.

carries_no_cash_two_tone_coffee_mug-raf354f7001b24e00906b05d9722565e2_x7j1m_8byvr_324Conclusion – What decides if a new way of paying with technology will be successful or fail? In the last five years, banks and fintech companies have had to choose between following the rules and trying to be the best. They’re exploring new ways to use technology because people’s behavior is changing and everything is becoming digital. Open banking services and APIs that are easy for developers to use are important parts of BaaS and BaaP. New technology and new ideas to improve payment methods in stores need to be available for everyone to use, even those who don’t have bank accounts.

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Posted by V Sharma

A Technology Specialist boasting 22+ years of exposure to Fintech, Insuretech, and Investtech with proficiency in Data Science, Advanced Analytics, AI (Machine Learning, Neural Networks, Deep Learning), and Blockchain (Trust Assessment, Tokenization, Digital Assets). Demonstrated effectiveness in Mobile Financial Services (Cross Border Remittances, Mobile Money, Mobile Banking, Payments), IT Service Management, Software Engineering, and Mobile Telecom (Mobile Data, Billing, Prepaid Charging Services). Proven success in launching start-ups and new business units - domestically and internationally - with hands-on exposure to engineering and business strategy. "A fervent Physics enthusiast with a self-proclaimed avocation for photography" in my spare time.


  1. excellent post


  2. Correct the speed of technology movement is very fast compare to critical item SECURITY


  3. saroj Verma at

    Hi Vinod, valid point is raised here and as everything is getting cashless, security is major concern. few months back in India many accounts were hacked and was huge loss to people and banks. People have been asked to take some preventive measures, but then point is foolproof inbuilt security methods should be there.


  4. Well said, I foresee a big secure breach in mobile banking especially through the use Mobile APPs by customers. There are fraudulent mobiles APPs out there which customers are prompted to install and after installation the fraudulent APP read customer SMSs on the phone including PINs. The information collected by these APPs is later used by fraudsters to hack into customers accounts……food for thought !


  5. […] This is the part-2 of my earlier post –  Digital Wallets: Innovation vs Security […]


  6. […] Digital Payments – In Digital payments world a million dollar question which still not being answered, “What is more important security or speed (Performance & Ease)“. Financial system security design principles can be organized into logical groups. For example, least privilege system can be considered as a principal and can appear in a group under structure/trust. In the case of “Secure System Evolution,” is the principal is in its own group. This is the part-2 of my earlier post – Digital Wallets: Innovation vs Security […]


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