Digital Wallet

A digital wallet holds digital versions of payment cards and sometimes other items, such as loyalty cards, tickets and identity documents. To pay, users typically tap their phone on a card reader or confirm the payment within an app or website.

Digital wallets often improve security. Instead of sharing the actual card number with the shop, the wallet uses a substitute number, called a token, for each transaction. Payments are usually confirmed with a fingerprint, face recognition or PIN.

Some digital wallets simply store existing bank cards. Others hold their own balance, which users top up and spend, and allow users to send money to each other. In some countries, digital wallets have become the main way people pay for everyday purchases.

For example, someone might leave their physical cards at home and pay for coffee, train tickets and groceries by tapping their phone.

Users should still be careful: protecting the phone with a secure lock and keeping apps updated is important, because access to the phone may mean access to payment methods.