What Is a Digital Wallet and How to Use It?

Thanks to digital wallets, it has become easier to access online or contactless payment from anywhere across the world. But what is a digital wallet? And how can you use it? Read on for answers.
Digital Wallet
What Is a Digital Wallet and How to Use It?
With the advent of technological development, contactless payment has become exceptionally popular among both consumers and merchants. Here's all you need to know about digital wallets.
In this article

A digital wallet helps people in storing their payment options, such as debit and credit cards. It allows you to conveniently use your smartphones to make contactless purchases. Here is all you need to know about a digital wallet and how to use it.

What is a digital wallet?

A digital wallet, also called an e-wallet, is an online payment tool where you can store virtual versions of your debit or credit cards to foster a contactless purchase. Using this allows users to avoid entering card details or even carrying a physical debit/credit card while making payments.

Users can simply link their debit card or credit card account to the wallet and make safe and quick transactions through the ease of their smartphones. 

How does a digital wallet work

A digital wallet usually employs software that links your payment details from your connected bank account to the merchant with whom you are making the contactless transaction. 

There are a number of apps that work as digital wallets, providing different types of access for financial transactions, including online purchases, contactless in-store payments, and even cashbacks.

Where can I use it to make a contactless payment

You can easily make an online payment using a digital wallet at any store or restaurant. Look out for the contactless symbol at checkout. While some vendors may allow you to simply tap and pay, others can prompt a PIN generation for the transaction.

The best digital wallets

There are various digital wallet apps available for users to choose from. The decision on the appropriate wallet totally depends on the user’s smartphone, location and payment needs. For instance, Apple Pay has become a go-to wallet for iPhone users. Android users often opt for Google Pay or Samsung Pay for their transactional needs. Others may use PayPal, which is accepted internationally. 

How to use a digital wallet

After choosing your best-suited wallet, you need to enter your card information. The credit/debit card details will then be encrypted from the backend. It will ensure that only you can use the wallet when you unlock your smartphone.

To make a contactless mobile payment, you have to authorize the digital wallet. Then, hold it close to the card reader to allow the information to be transmitted. Keep in mind, not all retailers accept mobile payments. Therefore, you will have to look for the contactless payment indicator at the checkout counter of your retailer.

People Also Read: How to Keep Your Crypto Coins Safe in the Best Wallets

What else can you use it for

They are great to store card information for ease of access. Apart from that, digital wallets are a great place to store and organize other important documents. Some of the documents a wallet can store, besides credit or debit cards, include boarding passes, hotel reservations, gift cards and loyalty rewards cards.

People Also Read: Online Payday Loans In Louisiana

Is it safe to use?

It is relatively safer to use a digital wallet because your personal information is not on the phone. The wallet acts as a bridge to process a payment between your bank account to the end vendor. A wallet is a safe, convenient, and contactless mode of payment using just your smartphone. 

Was this helpful?

Did you like the post or would you like to give some feedback? Let us know your opinion by clicking one of the buttons below!



Picture of Monica Aggarwal

Monica Aggarwal

A journalist by profession, Monica stays on her toes 24x7 and continuously seeks growth and development across all fronts. She loves beaches and enjoys a good book by the sea. Her family and friends are her biggest support system.


This page is purely informational. Beem does not provide financial, legal or accounting advice. This article has been prepared for informational purposes only. It is not intended to provide financial, legal or accounting advice and should not be relied on for the same. Please consult your own financial, legal and accounting advisors before engaging in any transactions.

Related Posts

can you send money from Cash App to Chime
Can You Send Money from Cash App to Chime
In the developing digital banking ecosystem, users want efficient solutions to handle funds. This blog investigates the relationship between Cash App and Chime, addressing the viability of direct money transfers. While not integrated for peer-to-peer transactions, combining the two platforms provides a complete solution that improves the ease of financial transactions.
how to send money from Zelle to PayPal
How to Send Money from Zelle to PayPal?
Explore modern banking using peer-to-peer payment networks such as Zelle and PayPal. This article explains the complexities of moving money from Zelle to PayPal, its alternatives, features, and the larger landscape of new financial apps.
How To Send Money From PayPal To Chime
Can you Send Money from PayPal to Chime

Get up to $1,000 for emergencies

Send money to anyone in the US

Ger personalized financial insights

Monitor and grow credit score

Save up to 40% on car insurance

Get up to $1,000 for loss of income

Insure up to $1 Million

Coming Soon

File federal and state taxes at low cost

Quick estimate of your tax returns

Get up to $1,000 for emergencies

Send money to anyone in the US

Save big on auto insurance - compare quotes now!

Zip Code:
Zip Code: