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Guide to digital wallets

A digital wallet lets you make online, in-person and in-app purchases using your phone.

Approximately 43% of US smartphone users use digital wallets to make mobile payments, and it’s projected to grow to 50% by 2025, according to Insider Intelligence. Digital wallets allow you to make contactless payments with your phone or smart device, as well as store essential information like insurance policy cards, loyalty cards, concert tickets, boarding passes and much more. They’ve revolutionized and streamlined the way we make transactions, providing a convenient and secure alternative to traditional payments.

What is a digital wallet?

A digital wallet, or mobile wallet, works like an electronic version of your physical wallet, offering contactless payments and other convenient digital storage options. The main convenience of digital wallets is that you don’t have to pull out a physical card from your wallet or be forced to enter your card’s information while online shopping since it’s stored on your mobile device.

A digital wallet stores your payment information — like a debit or credit card — to make quick payments. Most mobile wallets that perform in-person payments use near-field communication (NFC). This method of data transfer lets two devices communicate when they get within a few inches of each other.

Digital wallets aren’t limited to storing debit and credit cards, either. Many wallets allow you to store plane tickets, car insurance cards, gift cards, loyalty cards and more.

Are digital wallets the same as online banking?

In short, no, online banking is not the same as a digital wallet. It sounds very similar, but digital wallets are simply an app or service that allows you to store your preexisting cards in a separate app to perform contactless payments or online transactions. Online banking means managing your bank accounts through an app or a bank’s website.

How to use a digital wallet

Each wallet offers different features, and its use differs depending on the wallet you have.

In store

In most cases, if a store has a contactless card reader and accepts mobile wallets, you can open your mobile wallet from your phone or device, hold it up to the card reader and verify the payment on your device, and the payment will proceed.

For example, with Apple Pay, you can double-click the lock button to pull up your mobile wallet, hold the phone up to the reader, verify the payment with Face ID or your passcode and hold it up to the contactless card reader. Your phone “dings” and a checkmark appears on your phone if the payment is successful.

Online or in-app purchases

Many online stores accept digital wallets. When you’re ready to checkout through an online store, you can select the payment method — such as PayPal or Apple Pay — to verify the payment.

Other common uses

Aside from in-store purchases and online shopping, your mobile wallet may be able to:

  • Pay bills
  • Rack up points with loyalty cards
  • Store boarding passes for flights
  • Use gift cards
  • Conduct peer-to-peer payments
  • Use a cardless ATM

What digital wallets are available?

There are many digital wallets to choose from, but if you’re intent on having a mobile digital wallet, the ones you can use largely depend on what phone you have.

Apple Pay

Available to iPhone users, Apple Pay lets you make in-store purchases by holding your iPhone or Apple watch near a card reader and verifying the payment with a passcode, face ID or other methods. Apple Pay is compatible with over 85% of retailers in the US, and you can store all sorts of cards, including debit, credit loyalty, and membership and insurance cards. Apple Wallet can also store concert tickets, plane tickets, boarding passes, vaccination QR codes, coupons and gift cards. You can also send and receive money to other users through iMessage.

Google Pay

Google Pay, formally Google Wallet, lets you make purchases online or in person using your Android phone. Like Apple Pay, it’s available anywhere you see the contactless payment symbol. Cards accepted include debit, credit, loyalty and gift cards. It also offers “scratch-off cards” as cash rewards and other various prizes.

Samsung Pay

Available to users with a compatible Samsung device, Samsung Pay lets you pay online, in apps or in person. It works a lot like Apple Pay or Google Pay, and uses your fingerprint, PIN number or facial ID to verify your identity. Cards accepted include debit, credit, loyalty and gift cards.


Available for iOS, Android and Windows devices, PayPal is one of the most popular ways to buy items online. You can link it to a debit card, credit card or bank account and use it at online stores all over the world. But if you want to use PayPal in stores, you’ll need to use Google Pay. PayPal accepts debit cards, credit cards, loyalty cards and gift cards. You can also send and receive money to other PayPal users, and PayPal also offers its own debit card that can be seamlessly added to the PayPal digital wallet.


A top peer-to-peer payment system available on most smart devices, Venmo’s wallet offers credit cards, debit cards and personal bank management. You add funds to your Venmo balance from your linked bank account or card, and its main feature is the ability to send quick funds to family and friends. But you can also scan QR codes at businesses or from other individuals to make contactless payments. It accepts many cards, including credit, debit, and prepaid and network-branded cards like American Express, Discover, MasterCard and Visa.

Cash App

Cash App is mainly a peer-to-peer payment system available on most smart devices. Cash App lets you make contactless payments via QR codes. It accepts debit and credit cards from Visa, MasterCard, American Express and Discover. But it doesn’t accept business debit cards, ATM cards or PayPal. And similar to PayPal, Cash App also offers its own debit card issued by Sutton Bank called the Cash Card that’s connected to your Cash App balance.


Available on the App Store, Google Play and AppGallery, Stocard lets you carry loyalty cards in your smartphone or smartwatch free of charge and without any registration required. Just download the app, spend a few seconds adding any existing loyalty cards to your Stocard wallet, and you can carry the discounts with you wherever you go.

Click to Pay

Click to Pay, formally Visa Checkout, allows you to pay for things online where it’s accepted without re-entering your credit card information each time. But it doesn’t currently work in stores, and it’s not a mobile app. Despite being Visa, it accepts Mastercard, Discover and American Express cards as well.

Compare digital wallets

Narrow down top cards offered by popular digital wallets by fees, opening deposits and features. Select the Compare box to see options side-by-side for easy comparison.

1 - 2 of 2
Name Product Fee Minimum deposit to open Annual Percentage Yield (APY) Offer
PayPal Debit Card
Finder Score: 4.3 / 5: ★★★★★
PayPal Debit Card
$0 per month
Cash Card by Cash App
Finder Score: 4.4 / 5: ★★★★★
Cash Card by Cash App
$0 per month

How to choose a mobile wallet

When comparing digital wallets, factor in:

  • Card compatibility. Make sure you can sync your bank account and cards with the wallet you want. It’s also worth checking if the wallet accepts your bank or credit union.
  • Device compatibility. Not all wallets work on all phones and devices. If you want a digital wallet on your phone, compare compatible wallets for your specific device. For example, popular choices for iPhones are Apple Pay, PayPal and Venmo.
  • Features. Compare features such as contactless payments, peer-to-peer payments and online shopping compatibility. Many mobile wallets also offer their own debit or credit cards, such as Apple, PayPal and Cash App.
  • Rewards. If you use rewards programs, check the compatibility. Also, some mobile wallets, such as Google Pay, offer their own rewards program.

Are digital wallets safe?

Yes, digital and mobile wallets are safe. Digital wallets authenticate your purchases through encryption and digital certificates to secure the payment processes from you to the merchant. Encryption is a way of encoding messages so that only authorized people can understand them.

Arguably, the biggest risk with mobile wallets is that if you lose your phone and you don’t have safeguards set up, the theft or finder of your phone could access your mobile wallet. However, with passcode and security measures in place, it’s arguably safer than losing your physical wallet, as someone could simply take your physical cards and use them.

Ensure that your digital wallet has a number of security measures in place, such as encryption for every transaction, such as a passcode, thumb-print ID or Face ID.

What are the pros and cons of digital wallets?


  • Convenient. If you forgot your wallet or cards at home, you can still shop since your cards are on your phone.
  • Security. In comparison to a traditional wallet, digital wallets use encryption to keep your financial information safe. Even if you lose your phone, you can still keep your cards secure with safeguards in place.
  • Ease of use. Keep all your cards and accounts in one app to easily keep track of different payment methods.
  • Faster online shopping. Gone are the days of entering in 20-digit card numbers on every online store you shop at — if it accepts digital wallets.


  • Availability limited. Not every merchant has contactless payment methods, which means that you’ll still need to use cash or card at some stores.
  • Phone-reliant. If your phone battery dies or you don’t have service, you can’t access your cards. It’d be wise to carry your wallet just in case.

1 in 5 bank online

About 1 in 5 (19%) are now banking exclusively online, while 18% say they have an account with both an online and traditional bank.

Bottom line

Digital wallets are fast, simple and secure — and, most of all, convenient. Compare options to find the wallet that’s right for you. And to get the most out of it, compare checking accounts to find one that works seamlessly with the wallet you want.

Frequently asked questions

Written by

Bethany Hickey

Bethany Hickey is the banking editor and personal finance expert at Finder, specializing in banking, lending, insurance, and crypto. Bethany’s expertise in personal finance has garnered recognition from esteemed media outlets, such as Nasdaq, MSN, Yahoo Finance, GOBankingRates, SuperMoney, AOL and Newsweek. Her articles offer practical financial strategies to Americans, empowering them to make decisions that meet their financial goals. Her past work includes articles on generational spending and saving habits, lending, budgeting and managing debt. Before joining Finder, she was a content manager where she wrote hundreds of articles and news pieces on auto financing and credit repair for CarsDirect, Auto Credit Express and The Car Connection, among others. Bethany holds a BA in English from the University of Michigan-Flint, and was poetry editor for the university’s Qua Literary and Fine Arts Magazine. See full profile

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