Digital wallets + CPoI®: What merchants and consumers need to know
- Justin Pike
- 1 day ago
- 3 min read

Just a decade ago, most of us couldn’t fathom leaving home without a wallet or purse. Yet, digital wallets are making this a reality for millions of consumers worldwide, with 60% of eCommerce transactions projected to be done through digital wallets by 2026.
But how do digital wallets impact merchants?
And what role does CPoI® play in this new landscape?
Digital wallets have gained significant popularity over the past decade, offering a convenient way to pay with something we almost never leave the house with – our phones. They are particularly favoured by the younger Gen Z and Millennial generations, who prefer not to carry a physical card at all and have their wallets linked to their bank accounts and Buy Now Pay Later (BNPL) accounts. With most retailers accepting wallet payments both in-store and online and as the tech savvy Generations Alpha and Beta come of age, digital wallets adoption is only going to increase.
So how does CPoI® fit in with digital wallets, and why should consumers and merchants care?
Merchants do not significantly benefit from wallet payments
The biggest thing for merchants is that digital wallet payments made online are card-not-present, the same as online payments made by entering card details.
While digital wallets can improve the user’s payment experience by removing some of the friction, for all intents and purposes there is no difference to the merchant. And in the case of some digital wallets that operate their own payment schemes, there may even be additional fees the merchant has to pay on top of the usual transaction processing fees.
Merchants do significantly benefit from CPoI®
Regardless of whether the consumer is entering their card details or using a digital wallet, CPoI® enables card present payments to be made over the internet.
The liability for card present payments sits with the card issuer, which means in the highly unlikely event of a card present transaction being fraudulent, the merchant does not have to refund the cardholder. This responsibility lies with the issuer.
Conversely, the liability for traditional card-not-present payments made over the internet by entering card details or via a digital wallet sits with the merchant. This means that if a transaction is deemed fraudulent, the merchant not only must refund the consumer, but they are also out of pocket for the goods or service that will have been delivered.
The other benefit of CPoI® is that there is no need for anti-fraud software because the likelihood of a fraudulent card present transaction is incredibly low. Therefore, if you don’t have anti-fraud software, you don’t have false positives. And false positives are ten times more costly to merchants than online payment fraud.
Digital wallet security is not impenetrable
Digital wallets add a layer of security with biometrics, making it harder for unauthorized users to gain access. However, as with all technology, it’s important for consumers to stay aware of its limitations and take steps to protect their personal information.
Fingerprints can be copied and cloned.
Facial recognition can be fooled with deepfake technology and 3D masks.
Iris scans can be tricked using high-quality photos or contact lenses.
In 2015 the US Office of Personnel Management was breached and the personal data of over 21.5 million people, including 5.6 million fingerprints was exposed. The attackers could have used the stolen data for any number of crimes, including identity theft.
Biometric information is linked to a person’s physical body, so it is permanent. Unlike a PIN, it cannot be changed. Therefore, while digital wallets with biometric security have a degree of security, they can be used fraudulently.
Chip and PIN offer the highest degree of security
For consumers, there is no safer way to pay than with Chip (card) and PIN. I cover this in a previous blog so I’ll just recap here: The digital certificate in the chips means they cannot be cloned, and unless someone figures out how to read minds, the PIN cannot be stolen. This is what makes Chip and PIN the most enduring and safest way to pay.
We’ve been trusting it for more than two decades and it hasn’t failed us yet.
Digital wallets + CPoI®
As digital wallets become more ubiquitous, it's important to understand their benefits and limitations. While they offer unparalleled convenience for consumers, digital wallets still lack the security of card-present transactions like Chip and PIN. And for merchants, adopting CPoI® could provide the best of both worlds—security, fraud protection, and a smoother payment experience.
Reach out to our team if you’d like to know more.
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