Paysafe Calls Digital Wallets the New Hub for Payments and Commerce

The landscape of payments innovation is one shaped by the tension between the perception of frictionless innovation and the reality of legacy rails.

Bob Legters, chief product officer at Paysafe, told PYMNTS during a conversation for the What’s Next in Payments series February edition, “Word of the Year,” that this tension has increasingly positioned wallets at the forefront of payments and commerce.

“Wallets is our word of the year,” Legters said, noting that across both its merchant and consumer businesses, “the one thing that seems universal is the wallet.”

After a decade defined by the digitization of checkout and the rise of alternative payment methods, wallets are becoming the organizing layer of commerce, where identity, funds, rewards and brand engagement converge. And unlike more speculative trends, wallets are already embedded in the daily habits of billions of users.

Perhaps the most revealing insight is that many consumers don’t realize they’re using wallets at all.

“I’ve talked to multiple consumers where they’ve said, ‘Yeah, no, I don’t use wallets,’” Legters said, adding that just a few questions later, it becomes clear they keep funds inside apps, store balances for future purchases or manage segmented spending through digital platforms.

The wallet is embedded, invisible and normalized. And in 2026, it might just be set to have its best year yet.

Measuring the Wallet Economy

If 2026 belongs to wallets, how should success be measured?

Legters pointed to “shift mix,” or the proportion of total payment dollars flowing through wallet rails versus traditional systems. The goal is not elimination but rebalancing.

“Almost no payment methodology that’s been invented has ever been retired,” he said, noting that in a payments landscape of abundance, wallets can prove to be particularly valuable for both consumers and merchants.

“The average consumer used to participate in maybe one to one-and-a-half wallets, and now in certain markets it’s going up to six or seven,” Legters said.

One of the reasons for this growth is that instead of accessing pooled funds from a single bank account, consumers now distribute money across multiple wallet ecosystems. That includes converting rewards points, using crypto balances, toggling between debit and credit sources, and managing funds across borders.

“Give me access to my assets, wherever they are, in the wallet; and I’ll use your wallet all the time,” Legters said.

Cross-border capabilities are also especially critical. Wallet adoption is often strongest among internationally mobile consumers who find traditional banks too regionally constrained. Seamless foreign exchange and global payouts are no longer premium features but becoming baseline expectations.

From Loyalty to ‘Wallet Marketing’

On the merchant side, the lingering misconception is regulatory fear. Retailers assume that launching wallet functionality means entering the banking business.

In reality, Legters argued, wallets can streamline back-office processes and reduce costs without exposing companies to full financial regulation. Smart merchants are also viewing wallets not merely as payment conduits but as engagement engines.

“Moving money back to a consumer through a wallet is a way to instantly engage with them and not depend on the external ecosystem,” Legters said, noting that businesses increasingly encourage customers to transact within proprietary or co-branded wallets because it simplifies refunds, rebates and rewards.

A registered user with stored funds represents a uniquely valuable relationship: authenticated, financially active and reachable inside a closed-loop environment. Crucially, retailers can access this engagement layer without becoming banks themselves.

The most underappreciated opportunity may be payouts. Warranty claims, rebates, gig payments, cross-border contractor fees — these are traditionally treated as back-office financial operations.

But Legters reframed them as brand moments. “Those are still experiences that reflect on the brand,” he said, stressing that a smooth payout reinforces trust while a delayed one erodes it.

Speed and Fraud Protection as the First Signal

If wallets are the headline for 2026, transaction speed and closeness is the subhead.

By pulling funds into a wallet environment, money can move “closer to the transaction” than when it sits solely on traditional rails. Consumers see “more instantaneous money movement, more instant responses,” and feel “much more connected to the transaction,” Legters said.

Merchants experience a parallel benefit, as settlement accelerates and working capital frees up. Speed becomes not just a user experience enhancement but a liquidity strategy.

“We want a merchant to be able to provide a service, get paid, and then on the way back to their shop, replenish supplies,” Legters said, describing a near-real-time loop where revenue flows directly back into operations.

Underpinning all of this is a philosophical shift in how value is conceptualized.

“There’s only really two types of money in the world, right? There’s money you have and money you don’t,” Legters said.

Assets — whether deposits, crypto, equity — fall into the first category. Credit and risk define the second. Modern payment architecture, increasingly application programming interface (API)-driven and modular, aims to make any asset portable and transactable. Even traditional rails are evolving toward software development kit (SDK) and API frameworks.

“Build into this API structure, you can move anything,” Legters said.

Ultimately, he stressed, wallets are less about replacing banks and more about reconfiguring proximity — bringing funds closer to transactions, brands closer to consumers and identity closer to payment.