Telcos in Japan are fighting hard to win the digital wallet wars, said American Express senior vice president Nigel Lee. However, Buchanan doesn't believe Australian customers are willing to give that power to telcos. Kalra disagreed, citing people's willingness to buy prepaid services from telcos.

Kalra said with many concerned about personal privacy, winning trust is key. "Who will consumers trust to keep their information secure?" Banks could have an advantage in that game, he said.

All the panellists agreed that digital wallet makers will have to add functionality beyond payment to win customers.

By combining geo-location functionality from a smartphone, the digital wallet can make suggestions or send coupons based on what store the customer is currently visiting, Buchanan said. Users who add photos of themselves to the wallet may get a more personal service at a café because the images help baristas learn who their customers are, he added.

All digital wallet makers have work to do to convince consumers and merchants to adopt, the panellists said. "The vision around what is achievable through digital wallets is probably obvious to most of us," Lee said. "The components of that are the challenge."