Digital wallets What is it? How does it work? Which are the best?

Contactless payment methods have been gaining popularity among both merchants and consumers, especially in the midst of the pandemic. Digital wallets are one such method. They store payment options, such as credit and debit cards, allowing you to conveniently use your smartphone or smartwatch to make a purchase.

However, credit and debit cards are not the only things you can store in a digital wallet. You can also store gift cards, membership and loyalty cards, coupons, event tickets, airline tickets and more. In addition, you can use many digital wallets to transfer money to others.

How digital wallets work

Different digital wallets use different technologies to process payments:

Near Field Communication, or NFC: It allows two devices to exchange information if they are placed near each other. Apple Pay and also Google Pay use this technology. To use one of these digital wallets, the merchant must have compatible card readers at checkout.

Magnetic Secure Transmission, or MST: Generates a magnetic signal, much like swiping the magnetic stripe on a credit card. The signal is transmitted to the payment terminal’s card reader. Samsung Pay uses both MST and NFC technology.

QR codes: These are the typical barcodes that you scan with your smartphone camera. In the PayPal app, for example, you can generate a QR code that allows you to use your account to pay for an item in a store.

While the above examples of digital wallets can be used at any merchant that accepts them, there are also “closed” digital wallets, such as the Starbucks app, that are designed to be used only at a specific store.


How to choose a digital wallet

The major digital wallets like Apple Pay, Samsung Pay and Google Pay depend on the phone you carry. You can’t use Apple Pay on an Android phone, for example. So by sticking to a specific brand of phone, you’ve also chosen a potential digital wallet. PayPal is an exception because the app is available through Apple’s App Store and Google Play.

Using a digital wallet may also be limited by where you shop. Not all merchants accept digital wallets yet, so you will still need to carry a credit or debit card as a backup payment method.

Top digital wallets in 2023

PayPal Digital Platform for Payments
PayPal is an early player in digital wallets and has been slowly building a platform with user feedback. The result is a seamless browser platform that allows users to make and accept payments in more than 25 currencies from around the world, which is perfect for personal use.

Small businesses can also take advantage of its services, making it best for customers interested in simply the best digital wallet.

PayPal digital wallet features:
Save time and money by using PayPal.
Using PayPal is free if you send money through your bank account or if it does not involve any currency conversion.
PayPal will also provide a secure and fast payment method for those who have access to credit cards.
The mobile app has a simple interface that makes it easy to view recent receipts and expenses.
You can also pay by connecting your bank account.
Spend less time dealing with technology tools.
Get paid instantly when selling products or services online.

Exodus (Crypto Wallet)
The best thing about the Exodus Crypto Wallet is that it has a sleek and simplistic design. The Exodus wallet is best for long-term storage. It also supports over 20 major cryptocurrencies, including Bitcoin (BTC), Ethereum (ETH), Litecoin (LTC), as well as other popular coins like Dash, Monero, Ripple XRP & more.

The best digital wallets in 2023 have to be easy to use. Exodus is an all-in-one package, which means you can send, receive and store some of your best cryptocurrencies with just a few clicks or taps on the screen. The best thing about this wallet? It’s totally free for personal use.

There are three key reasons that make Exodus the best on the market: security, versatility and support. Security: The company stores your private keys on a machine that has never touched an Internet connection, so it can’t be hacked remotely or compromised by malware.

Versatility: You can store multiple cryptocurrencies with this software (Bitcoin, Ethereum, Litecoin).

Support: The customer support team is always available to help you. They will even keep your funds if you need them – no risk of hacking either.

Other than that, you can use this wallet to make deposits to reliable iGaming platforms that accept cryptocurrencies like Bitcoin. Some only accept digital currencies – this makes it more of a private opportunity to gamble on the Internet. To find the best bitcoin online casino, you can check reviews on trusted review sites like OnlineCasinoHex.

However, Exodus is best for beginners, as it does not use open source. This means that it is not part of the blockchain network that all cryptocurrencies are based on. This is a big concern for some, which is why Exodus remains popular for beginners rather than advanced cryptocurrency holders.

Unlocks the potential of cryptocurrencies with a single click.
Simplify transactions by switching between a wide variety of currencies.
Keep your coins safe on this hardened platform.


The next incarnation of digital wallets is the Alipay platform, which was an early adopter. Offering 1 billion users worldwide and 80,000 stores using its service in Asia, it is an ideal hub for personal or business transactions with a unique encryption platform that adds a layer of security.

Ultra-protection: Alipay uses industry-leading encryption to keep your information private
Low fees: Alipay’s low transaction fees (typically less than 1%) are significantly lower than banks.
24/7 Customer Support: Whether you speak Chinese or not, they have customer service available anytime, anywhere.
Versatility of the mobile app: You can pay in stores, transfer money, settle bills and much more through the app.
No waiting for in-store verification processes: Don’t bother waiting for a cashier to verify your identity when paying.


Coming off the list of the best digital wallets is Venmo, a platform popular among millennials who want to make quick transactions.

Venmo’s popularity is due to its simplicity and ease of use: it allows users to send money back and forth electronically through their phones or computers without having to wait for approval or enter complicated information, freeing up time that could be spent on something else.

Free money transfers: Send any amount of money you want for free. You no longer have to worry about the cost of your wire transfer. Choose from over 700 world currencies for your payment.
Generous friends: You can request anything under $500 from your friends on Venmo in a matter of seconds – perfect when you need last minute concert tickets at the last minute!
A history of payments: Venmo has been in business since 2010, so if you have a lot of transactions to do it’s best to start there.
Fast and easy transfers: Get paid on time with Venmo’s release payment option. The app offers convenience for those who want instant access to their money or just don’t feel like dealing with the hassle of waiting at an ATM.
Simple interface: Less time spent trying to figure out how something works.
Secure: Send money to friends and family securely.

Are digital wallets safe?

New technologies always make consumers hesitant, especially those involving sensitive banking and credit card data. However, digital wallets have a built-in security feature – a process called “tokenization” – that keeps your credit or debit card number secret when you make a purchase.

Basically, when you pay for something, instead of sending your actual credit or debit card number to the merchant, the digital wallet generates a one-time-use token made up of random numbers. That token is the one used to process the payment, while your personal information remains secure.

In addition, even accessing the digital wallet involves other layers of security, such as requiring a PIN or biometric information (fingerprint or facial recognition).

Still, you should exercise some caution. Always keep an eye on your phone and cover the screen if you are going to enter your access code in a public place.


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