Linux Foundation Europe launches the OpenWallet Foundation to power interoperable digital wallets

The Linux Foundation's European off-shoot has formally launched the OpenWallet Foundation (OWF), a new collaborative effort designed to support interoperability between digital wallets through open source software.

The launch comes some five months after the Linux Foundation first revealed plans to set up the OWF, shortly before it spun out a region-specific entity called the Linux Foundation Europe which is where the OWF will now officially reside.

While the likes of PayPal, Google and Apple are among the most recognized digital wallet providers, allowing consumers to conduct financial transactions in-store or online, digital wallets are increasingly being used to store all manner of virtual goods, from student ID to driving licenses. On top of that, burgeoning technologies such as the metaverse and crypto are giving rise to greater use cases for digital wallets.

But one thing all these various environments have in common is that the incumbent digital wallets, for the most part, don't play nicely with each other: an Apple Pay die-hard can't send money to their Google Pay brethren. And that is why the OWF is setting out to create an "open source engine" that can power interoperable digital wallets across myriad use cases, including identity, payments and storing personal credentials such as employment and education certification.

Alongside today's launch, the OWF and Linux Foundation also published a new report to highlight the importance of a more open digital wallet ecosystem, noting that the total value of all digital wallet transactions was $15.9 trillion in 2021. The market is significant, as is the need to help companies avoid vendor lock-in, which is one of the OWF's core selling points.

It's worth stressing that the OWF won't be building a digital wallet itself, or developing new standards -- it wants to create the technological core that any other third-party can use to power their own digital wallets.

The OWF was the brainchild of Daniel Goldscheider, CEO of open banking startup Yes.com, who spearheaded the project's initial development as it was incorporated into the Linux Foundation.

"We are really focusing on the layer between the standards and the wallets, we will not create standards, and we will not create a wallet, we are focusing on open source software on top of those standards, but underneath the wallets," Goldscheider told TechCrunch. "And our role model really is the browser engine. What's interesting about browser engines is that they're not one thing, when you zoom in there is a lot going on -- there is HTML and JavaScript and audio codecs and video codecs. So the same is true for the OpenWallet Foundation. There will not be one OpenWallet codebase, or one OpenWallet architecture."