Key Takeaways
- A digital wallet is an application that can store your credit or debit card information, with the purpose of streamlining your online shopping experience;
- The term “digital wallet” may also refer to a Web3 / cryptocurrency wallet used to store crypto coins & tokens - some (but not all) apps offer shared functionality;
- Most reputable digital wallets are safe, employing multiple security features to protect your assets and personal information.
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What is a digital wallet and how does it work? If you spend enough time on the finance side of the internet, these are questions that you’re bound to encounter, sooner or later.
It’s become a hot topic for multiple reasons. First and foremost, digital wallets are becoming increasingly more popular by the day, due to the benefits that they provide to the average individual. Furthermore, many people confuse digital wallets with those that are designed to store cryptocurrencies - is it the same thing, or a completely different product altogether?
Let’s clear up all of this confusion. I did the research so you don’t have to - take a look at my overview below, or jump into the full, detailed explanation! And if you’re searching for a top-tier digital wallet yourself, take a peek at Ogvio - it’s shaping out to be a game-changing project in this space.
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Table of Contents
- 1. What is a Digital Wallet: A Quick Overview
- 2. Digital Wallets in Finance
- 2.1. Are Digital Wallets Secure?
- 2.2. How to Use a Digital Wallet
- 2.3. The Pros & Cons of Digital Wallets
- 3. Digital Wallets in Crypto
- 4. Best Digital Wallets in 2025 & Beyond
- 4.1. Ogvio - A Soon-to-Launch MTS Gamechanger
- 4.2. Krak - A Global Money App
- 4.3. PayPal - Digital Wallets for Businesses
- 4.4. CashApp - Convenient, but Limited Availability
- 4.5. Venmo - Turning Payments Into a Social Experience
- 5. Conclusions
What is a Digital Wallet: A Quick Overview
So, what is the digital wallet definition?
Latest Deal Active Right Now:Essentially, a digital wallet is an app on your smartphone that stores your payment information (credit or debit card info & credentials), and allows you to check out faster whilst shopping online.
Typical examples of digital wallets include Apple Pay or PayPal.
Yup - it’s that simple. Chances are that you’re using a digital wallet in your day-to-day shopping activities, too!
Admittedly, credit / debit card information isn’t the only type of data that can be stored on a digital wallet - it’s just the most common use case. The list includes e-tickets to events, coupon codes, and even cryptocurrencies.
Digital wallets can also store your actual assets, too, such as fiat currencies or stocks.
In fact, whilst researching what is a digital wallet and how does it work, you’re bound to come across definitions including crypto, or even focusing exclusively on it, too. That’s because the term “digital wallet” CAN refer to a cryptocurrency wallet, although it’s rarely used this way.
For the sake of brevity and consistency, we’ll take a look at both digital wallet definitions separately. Let’s focus on the traditional definition first.
Looking for more in-depth information on related topics? We have gathered similar articles for you to spare your time. Take a look!
Digital Wallets in Finance
Earlier in the guide, I mentioned that digital wallets are becoming increasingly more popular by the day. So much so that it’s a global phenomenon, with more than half of all online transactions worldwide being made via a digital wallet.[1]
The key driving factor for this boom in popularity is simple - convenience. These applications have bridged the gap between you having to type out your card information by hand, and a smooth & quick checkout process.
Think about it yourself - remember the last time you bought something online. You know that feeling, when you enter the checkout page, and see a huge section that needs to be filled out with your address, contact information, and payment details, only to then notice the big, yellow “PayPal” one-button-checkout option below?
Yeah - that feeling is essentially the driving force behind the popularity of digital wallets.
Convenient payments are just part of the appeal, though. Generally speaking, on many of the higher-end digital wallets, you’re also able to store:
- Coupons & vouchers
- Digital tickets to concerts or other events
- Travel tickets (planes, trains, etc.)
- Loyalty cards with accumulating points
- Reservations (hotels, Airbnbs, Booking, etc.)
- etc.
Some digital wallets even allow you to store your ID on them, unlocking smooth access to a whole myriad of additional services!
In a sense, you can view digital wallets as a sort of hub for your financial dealings. You have access to all of your essential information in one convenient place - sound great, doesn’t it? Well, it is! However, as you can probably imagine, with so much sensitive personal data being at stake, security is the No. 1 question that pops into people’s minds.
Are Digital Wallets Secure?
Digital wallet scams are intricate, and are actively becoming an increasingly severe issue.[2] It’s a really big topic, with multiple “for’s” and “against’s” on both sides. Let’s dissect it, though.
To put it simply, if you’re using a reliable, well-established or transparent digital wallet, you needn’t worry. The vast majority of trustworthy digital wallets out there take intentional over-the-top precautions to protect their user data - simply because they understand the implications of what would happen if they did get hacked.
That being said, a lot of responsibility falls on the user’s shoulders, as well. No matter how secure a wallet like that might be, if you leave your phone unlocked, with the wallet app open in a busy airport or shopping mall, there’s a pretty good chance that you’ll end up disputing some fraudulent purchases made with your credit card.
User-side security inefficiencies are arguably the biggest factor when it comes to issues faced with digital wallet examples. Thus, users are urged to exercise caution and practice proper security etiquette - ensure their mobile devices have multiple layers of protection from unauthorized third parties, never leave their wallet apps open, never click on shady links or deal with unreliable vendors, and so on.
A point to consider here is that many digital wallets actually act as a sort of layer of protection for your personal information. Think of it this way - if someone were to steal your physical wallet, they can take out your credit or debit card, and use it - all of the required information is right there, on the card.
However, if your phone gets stolen, the thieves would still have to bypass your wallet’s security in order to get access to your information. Even then, many wallets require PIN code or biometric confirmations upon making purchases - that’s a whole different headache for the malicious actors, and it can be very effective in keeping your funds safe.
How to Use a Digital Wallet
Now, then - how does a digital wallet work?
In truth, using a digital wallet is usually very simple; however, there are a few caveats. In most cases, you would be using a wallet with a connected bank account or credit / debit card (think of platforms like Google Pay or Apple Pay).
With services like this, all that you need to do is enter all of your card details into the wallet, and designate it as the primary payment method when checking out. Then, with the help of the “tap-to-pay” functionality on your mobile device, all you need to do when checking out in a physical store is tap your phone at the designated spot on the card reader - that’s it, you’ve just made a payment from your digital wallet!
On the flip side, how does a digital wallet work online? Well, if you have your card or bank account connected already, the process is even simpler - upon checking out, select the digital wallet as your payment method of choice. A few confirmation clicks, and you’re done!
Note that some digital wallets don’t necessarily support integrated payments, however! Such platforms act more as a place to store your assets or personal information, rather than perform automated transactions. Instead, if you want to make a payment from a digital wallet like this, you would need to do so manually.
“What’s the point, then?”, I hear you ask. Well, it depends - oftentimes, wallets like this offer better transfer fees, broader fiat currency support, or additional features for the users to enjoy (i.e. earn, stock or crypto holdings, etc.).
The Pros & Cons of Digital Wallets
We’ve discussed what is the primary purpose of a digital wallet and went over how such wallets work. It’s a lot of information to take in - I get that.
Take a look at the table I’ve come up with below - it highlights the main pros & cons of using a digital wallet:
✓ Pros | ✗ Cons |
|---|---|
✓ Very convenient and time-saving | ✗ Won’t work if there’s no internet connection / Bluetooth |
✓ Optimized storage for your personal information | ✗ Won’t work if your phone battery dies |
✓ Acts as a layer of protection for your payment details | ✗ Digital wallet scams and exploits are growing, together with the popularity of these tools |
Table: The pros and cons of digital wallets
App wallets (some people compare digital wallets VS mobile wallets, but they're very similar - mobile-exclusive wallets just have more limitations) are convenient and very straightforward to use. The only big caveat that comes with a wallet like this is the fact that you’re essentially at the mercy of your mobile device not spazzing out, or not deciding to die at the worst possible moment.
It can be a headache. And it’s not really something that people tend to think about when contemplating what is a digital wallet. However, just how much of an actual issue this is depends entirely on your perspective.
Other than that, once you figure out how does a digital wallet work, you’ll likely soon find it to be a very optimal tool for doing all of your online shopping, and more!
Digital Wallets in Crypto
Now, I won’t get too deep into this rabbit hole, but we do need to address the elephant in the room - the digital wallet definition as it pertains to cryptocurrency storage.
Crypto wallets are used to store different coins & tokens - that part is self-explanatory. One thing that’s become popular as of late are hybrid wallets - projects that support both crypto storage, as well as fiat currencies.
One good example of a platform like this is Ogvio - a brand-new, soon-to-launch digital wallet & money transfer service. It’s going to be a browser-based experience (with an app projected to come out later) where users will be able to perform instant, free-or-almost-free transfers across the globe.
Furthermore, the platform will support both fiat and crypto storage - hence the “digital wallet” aspect.
Now, comparing a digital wallet VS mobile wallet VS crypto wallet, these concepts share a lot of similarities. However, not all crypto wallets support fiat storage or credit / debit card connection (and vice versa).
So, to sum up - when looking at what is a digital wallet, you might encounter definitions pertaining to both traditional and crypto wallets. That being said, by default, and in most cases, “digital wallet” refers to the former - an application that stores your payment information (among other things), and streamlines your payment process.
Crypto wallets, on the other hand, are usually referred to as just that.
Best Digital Wallets in 2025 & Beyond
With all of that theory discussed and out of the way, let’s get a little more specific, and talk about the best digital wallet examples that you should be aware of.
Google Pay, Apple Pay and Samsung Pay are frequent mentions when it comes to the best digital wallets. However, I decided not to include them in the list because there are other services offering much wider functionality and more features to explore. That said, these three are still worth mentioning and keeping in mind!
Ogvio - A Soon-to-Launch MTS Gamechanger
Ogvio is a new project in the money transfer service (MTS) space. In the same vein as other names mentioned on this list, it offers a combined functionality of money transfers, as well as asset storage.
What makes Ogvio stand out? A couple of things. First of all, unlike apps such as Google Pay or Apple Pay, Ogvio allows users to store their actual assets on the platform - not credit / debit card information. Simply transfer money from your bank account to Ogvio, and that’s it.
Why’d you want to do that, though, when using one of the aforementioned examples is quicker and easier? Well, for starters, transfers on Ogvio are going to be free between users (using the @Tag functionality), with incremental fees outside of the ecosystem.
Furthermore, Ogvio will feature a couple of earning opportunities for users who keep their assets on the app. Since your local currencies will be kept in USD or EUR, this essentially means they’ll be pegged to two of the strongest currencies in the world - something that can result in indirect earnings via an inflation hedge.
Ogvio will feature a referral program - you can find out more about it on its official website!
While not following the digital wallet definition precisely, Ogvio will act as a hybrid wallet, allowing users to store both fiat and certain cryptocurrencies on it. No matter what you’re looking to transfer, Ogvio’s got you covered!
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Krak - A Global Money App
Krak is a “money app” that was built and launched by Kraken, a well-known and established cryptocurrency exchange.
With such a large name behind it, even though it’s a new project, Krak comes equipped with a variety of features that you’d expect from a top-tier service provider of this kind.
First of all, similar to Ogvio, Krak features @Tag functionality - users can create usernames for their accounts, and send / receive money in the same way they’d send a DM to a friend.
Both fiat and crypto transfers on Krak are quick and seamless, no matter where the recipient resides. On top of that, thanks to Krak’s earning functionality (Krakbacks), you can actually earn some random crypto for each money transfer that you make.
Krak is also backed up by Kraken’s security features, possessing Proof-of-Reserves functionality. What it essentially means is that you can independently confirm that all of your account balances are backed on-chain!
PayPal - Digital Wallets for Businesses
You can’t really figure out what is a digital wallet without coming across PayPal - one of the best-known and widely-used digital wallets on the market.
PayPal is synonymous with online payments and money transfers. So much so, that many of the major retailers have integrated it into their checkout pages, so that customers can complete their purchases in just a few clicks.
However, while PayPal features money transfer functionality, the digital wallet part is often more relevant to businesses. If you’re a business owner, you’d be able to use PayPal to store your funds, and streamline payments made by your clients.
PayPal now offers cryptocurrency support, as well!
Of course, PayPal also features the “traditional” functionality, as I’ve covered earlier when talking about digital wallet definitions. You can add your credit or debit card info to your PayPal account, and the next time you shop online on a supported marketplace, you won’t need to type out your payment details - just click a button, and finalize your payment!
PayPal is a well-known and trusted money transfer service & digital wallet. If you’re a small business owner looking to expand your Etsy shop or accept different payment options for your products / services, consider PayPal as a viable option!
CashApp - Convenient, but Limited Availability
If you’re someone who resides in the US and is looking at what is a digital wallet, CashApp is bound to have crossed your radar.
A well-known service provider, CashApp positions itself as the “cool, simple-to-use” digital wallet of the lot. All you need to do to get started is create an account and link your bank account to it - that’s it.
Sending & receiving money via CashApp is an ordeal that requires only a couple of button clicks. Same as Ogvio and Krak, CashApp has $Cashtag functionality, allowing you to skip having to input long IBANs into the recipient address bar - just enter their $Cashtag, and click send.
What is the primary purpose of a digital wallet? That’s right - simplifying your checkout process, while simultaneously adding a layer of protection over your payment data. However, CashApp takes it a step further, offering users crypto and even traditional stock support.
The one big negative regarding this platform is that it’s only available in the US and UK. If you reside anywhere else in the world, you won’t be able to make money transfers via CashApp, or use any of its core features, in general.
- Secure and reliable
- Accepts fiat currencies
- Lots of trading options
- Reputable exchange
- Accepts fiat currencies
- Offers various trading options
- Huge trading variety
- Regulation-compliant around the globe
- Fair trading fees
- Beginner-friendly
- A wide array of features
- Vast number of different crypto coins & tokens
- Beginner-friendly
- Secure
- Decent trading and withdrawal fees
- Crypto.com Visa Card
- Automated tools & bots
- Ecosystem synergy with CRO
Venmo - Turning Payments Into a Social Experience
“I’ll Venmo you the $10.”
Sounds familiar? Yeah - whenever a brand name becomes the verb for doing something, you know that it has cracked the code.
Venmo focuses on the social experience of making payments. There’s a feed where you can see the payments and transfers made by your friends and family, kind of like a Facebook (Meta) feed for your friends’ posts.
Obviously, you can opt out of having your payments displayed publicly, but it’s still a pretty cool idea, nonetheless.
Making a payment with Venmo is fast, straightforward, and hassle-free. Once you connect your banking account to the app, you no longer need to figure out what is a digital wallet - you’re using one already!
Venmo also has a debit card that you can acquire and use. It’s a good example of how physical payments get integrated into the digital wallet realm.
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Conclusions
If there’s one thing I want you to take away from this “What is a Digital Wallet?” guide, it’s the fact that the definition of this term is quite expansive. You have your very straightforward digital wallets, such as Google Pay and Apple Pay. Then, there are P2P digital wallet / money transfer services, such as Ogvio and PayPal.
And, of course, there are hybrid wallets that support additional asset storage (such as crypto or stocks) - many, but not all, mainstream wallets offer such functionality nowadays.
Most digital wallets allow you to connect your personal payment information (credit or debit card numbers, bank account) to them, in order to streamline and expedite your online shopping processes. Some of them even support multiple additional integrations, such as event tickets or e-ID storage.
All things considered, if you’re looking for a well-rounded digital wallet with a variety of features, 160+ country support and instant money transfers, keep an eye out for Ogvio - join the waitlist to not miss out on its launch! If you’re already on the waitlist, make sure to check out BitDegree’s Season 8 Airdrop, for a chance to share the $15,000 prize pool, as well.
The content published on this website is not aimed to give any kind of financial, investment, trading, or any other form of advice. BitDegree.org does not endorse or suggest you to buy, sell or hold any kind of cryptocurrency. Before making financial investment decisions, do consult your financial advisor.
Scientific References
1. Capital One Shopping: 'Digital Wallet Statistics (2025)';
2. Lola Omo-Ikerodah: 'What does fraud look like on digital wallets?'.
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