Our wallets are not the slickest items we carry. They contain cards, cash, and coins, driving licenses, identification documents, photos of loved ones, vouchers, tickets, travel cards, you name it. If you’ve ever been in a position where your wallet has been lost or stolen, you know how difficult and cumbersome it is to replace the items in it.

Luckily, with a digital wallet, your card information, and even travel passes and some vouchers, can be kept safe and not be misused by anyone. But what is a digital wallet, how does it work, what are its benefits, and where can you use it? This blog post answers these questions.

What is a digital wallet?

Also known as an e-wallet or an electronic wallet, this may not be enough to give you a clear picture of the question: what is an electronic wallet? So, let’s give you a brief definition. In simple terms, a digital wallet is an electronic form of your wallet. Your bank card details are stored on your smartphone, and you can use this “digital” card to make payments in-app, in-store, or online.

How does a digital wallet work?

A digital wallet works much like a real wallet, except you don’t have to dig in your bag to find it or wait for as long in queues. A digital wallet stores the cardholder’s card information and whenever a purchase is made at a retailer or merchant, the card data is transmitted via the cardholder’s smartphone, in an encrypted form, and is communicated to the POS device.

This enables all the relevant parties in the payment process to communicate effectively and determine whether there are enough funds in the cardholder’s card to proceed with and approve the transaction. 

What Are the Benefits of a Digital Wallet?

There are many benefits to using a digital wallet as opposed to a physical one that you keep in your bag. Here are a few of them: 

  • Convenience: first off, you no longer need to carry your cards with you everywhere you go or fill in card information whenever you shop online. This makes the process super convenient. 
  • Organisation: a digital wallet provides you with a single location for all your payment information. This can help you stay more organised. 
  • Security: because card data is encrypted, this means that your actual card details are not provided to the merchant. This adds an extra layer of security to your purchases.
  • Rewards: as a bonus, you can also earn rewards for spending with your digital wallet such as cashback or other goodies and treats that your digital wallet provider offers.

Where can you use it?

Just like a physical, plastic card, a digital wallet can be used on the go at retailers who have POS devices and accept contactless payments; you can also use it when shopping online; there’s also the ability to make in-app purchases as well.

Even better, sometimes, you’ll be able to withdraw cash from ATMs which enable this functionality, although the European case for this is rather limited to date.


Now that you know what is an e-wallet and how secure it is, isn’t it time you give it some thought and consider adding your cards to your chosen app? Some of the world’s most popular digital wallets are Apple Pay, Google Pay, and Samsung Pay. Choose the one that you feel will suit your needs best and enjoy seamless shopping!