Especially during the COVID-19 pandemic, contactless, fast payment methods have exploded in popularity. Many still prefer cash transactions, but for many customers, the ability to keep cards in electronic form has been a game-changer.
A digital wallet is secure, electronic storage for a customer’s payment methods. Digital wallets are much more than just a photo of one’s cards; they’re a sophisticated payment system offering customers variety, safety, and convenience. But not all eWallets are of equal quality. Here are some of the key features to look for when determining the best digital wallet for you.
Table of Contents
- Main Features of Digital Wallets
- Amazon Pay
- Apple Pay
- Cash App
- Google Pay (formerly Android Pay)
- Samsung Pay
- Vodafone M-PESA
- Walmart Pay
Main Features of Digital Wallets
Digital wallets have many different features, and each platform is unique. But five features emerge as the most common and important to look out for when choosing a digital wallet.
1. Payment Methods
When considering eWallet options, consider the payment methods available. These usually fall into two categories: proximity-based and remote payments.
Proximity-based payments are those between a digital wallet and a merchant in-person. They’re usually based in one of three technologies:
- Quick Response (QR) Codes: QR codes are matrix barcodes that transfer information when scanned by a device’s camera.
- Near-Field Communication (NFC): NFC technology allows two smart devices to make a temporary connection to transfer information. Devices must be within about 1.5 inches (4 centimeters) from each other to connect.
- Magnetic Secure Transmission (MST): The shopper’s cell phone creates an encrypted field readable by the point-of-sale system.
Many digital wallets that support any of these technologies can often be used on wearable tech like smartwatches, which adds further convenience.
Remote payments refer to traditional ecommerce transactions. The digital wallet replaces the act of punching in a credit card number, often adding an extra layer of security to transactions.
2. Payment Types
Some digital wallets will support only payments between apps or directly to merchants. In addition to payments to merchants, the best digital wallet solutions support:
- Instant payments between users.
- Instant or fast payments between a user’s wallet and their bank account.
- Payments for utilities or other bills.
Platforms dedicated to a single merchant often offer a single payment method, but the most flexible platforms offer many different payment types.
3. Required Registration
Many digital wallets appeal to users when they are unbanked. Many people worldwide either lack access to or choose not to use bank accounts for their money. For many, the best digital wallet will not require a bank account. For those solutions that support (or even require) a bank account or debit card, many digital wallets support NFC connections with card-free ATMs for cash withdrawals.
4. Budgeting Tools
Because it’s harder to visualize actual spend when using a card or app versus cash, consumers tend to spend 88% more when not paying in cash. Combine speed and simplicity with these statistics, and it’s no surprise that online shopping can have a serious, negative impact on people’s finances. The best digital wallet solutions offer budgeting tools to their users, helping them use the platform responsibly.
5. Crypto Support
There are many dedicated crypto wallet solutions, but many digital wallets also support cryptocurrency, either to store it or to buy and sell it. While it isn’t necessary for an eWallet to handle crypto, it’s nice to have in a world where crypto is increasing in popularity.
Here are ten of the most popular digital wallets available in 2022, presented in alphabetical order.
Alipay by Chinese giant Alibaba is the most popular digital wallet in China. Operating in simplified and traditional Chinese, and more recently in English, Alipay supports four of the five key attributes to look for in a digital wallet.
Payment Method: Alipay can be used for both remote, online payments as well as for proximity-based payments. In-store, Alipay uses either of two QR code-based payment methods: merchant-presented, in which the customer scans the merchant’s code to pay through Alipay, and customer-presented, in which the customer presents their code to the merchant to scan at their point-of-sale (POS) system. The customer-presented method helps overcome a weak Internet connection. Alipay works on a variety of smartwatches for wearable tech payments.
Payment Types: Alipay users can send instant payments to one another and between their Alipay account and their bank account(s). And unlike some other eWallets, Alipay can be used for bills ranging from ecommerce to utility payments.
Required Registration: Alipay does require a Chinese bank account; the only version of Alipay available to tourists is a 90-day Tour Pass. It cannot be used for ATM withdrawals, though linked bank accounts can take money from or add money to Alipay.
Budgeting Tools: The platform includes graphics-based budgeting tools that make monitoring more fun.
Crypto Support: Alipay is not permitted to handle Bitcoin and other cryptocurrency transactions, as China has banned cryptocurrency.
Amazon Pay from Amazon is a simple way to shop tens of thousands of ecommerce sites. Amazon Pay supports three of the five key attributes to look for in a digital wallet.
Payment Method: While Amazon Pay doesn’t work in most brick-and-mortar stores and doesn’t support NFC smartwatch payments, it is excellent for ecommerce. Amazon has a list of featured stores that accept Amazon Pay – and of course it works best on Amazon.com or anywhere with the “Amazon Pay” button.
Payment Types: Payments through Amazon Pay are instantly charged to your associated card, and there are no fees incurred on transactions. Amazon Pay does not support payments between users or between eWallets and banks. The Bill Planner feature lets you pay utility bills through Amazon Pay, which can be managed via Amazon’s digital assistant, Alexa.
Required Registration: Amazon Pay doesn’t require a bank account, as it only works with credit and debit cards. Because it isn’t tied to a bank account, Amazon Pay cannot be used for ATM withdrawals.
Budgeting Tools: Amazon Pay does not have a dedicated budgeting tool, but it does have a searchable transaction history so you can monitor your spending. Its Bill Planner feature also helps manage funds going towards utility bills.
Crypto Support: Amazon Pay does not currently enable crypto management, but payments can be made with cryptocurrency.
Apple’s Apple Pay is user-friendly and widely used among Apple users. Apple Pay supports four of the five key attributes to look for in a digital wallet.
Payment Method: Apple Pay can be used for proximity-based, in-store payments via an iPhone or Apple Watch, and it can be used easily for remote ecommerce. Apple Pay comes built into Apple devices, so it is immediately ready for use once payment methods are added.
Payment Types: The Apple Cash feature enables instant fund-sharing between Apple Pay users through the Messages app. Transfers between Apple Cash and a bank are supported. Users can load up to eight payment methods onto their Apple Pay, and there are no additional fees for transactions. Some companies, like Xfinity, allow bill payment through Apple Pay.
Required Registration: Apple Pay requires a credit or debit card associated with certain bank accounts. The connection between Apple Pay and Apple Cash allows for immediate fund transfers, and certain major banks support Apple Pay withdrawals at their cardless ATMs.
Budgeting Tools: Apple Pay has budgeting features only for the Apple Card. For all other cards, a third-party app is needed for budgeting.
Crypto Support: Crypto is a supported payment method in Apple Pay, but the purchase of cryptocurrency with Apple Pay is currently only under consideration.
Cash App by Square is immensely popular among those without a bank account, as an account isn’t required to sign up for Cash App. Cash App supports four of the five key attributes to look for in a digital wallet.
Payment Method: To pay in-store with NFC proximity payments on a cellphone or via wearable tech, Cash App users must sign up for a Cash Card, a free Visa debit card tied to your Cash App account. Cash Card also allows for ecommerce transactions.
Payment Types: Cash App supports instant transactions between users, but payments between Cash App and a bank account take a few business days. It can also be used for bill payments.
Required Registration: Cash App does not require a bank account, relying instead on your email address or phone number for identification. To withdraw funds from Cash App, a bank account is required – but many users simply receive and spend funds directly through Cash App.
Budgeting Tools: Cash App does not have dedicated budgeting tools, but the app’s interface helps users visualize their spending.
Crypto Support: Cash App supports the buying and selling of Bitcoin (BTC) from a Cash App balance within seconds. Proceeds are spendable from your associated Cash Card.
Google Pay (formerly Android Pay)
Google Pay (not to be confused with Google Play) came from a merger of Google Wallet and Android Pay – though Google is currently considering separating them again. Google Pay supports four of the five key attributes to look for in a digital wallet.
Payment Method: Google Pay supports NFC touch-free purchases in stores, ecommerce, and can be used on wearable tech. It’s backed by Google’s privacy settings to keep your cards safe.
Payment Types: Google Pay supports instant payments between users, and users can make transfers between their Google Pay account and its associated bank account. Some countries, like India, support utility bill payments through Google Pay; this is not currently available in the U.S.
Required Registration: Google Pay requires users to link either a bank account or debit card associated with a bank account to use the service. Because it’s linked with a bank account, Google Pay can be used for ATM withdrawals at participating banks with cardless ATMs.
Budgeting Tools: Google Pay has a number of budgeting tools to help manage money within the platform. Google Pay also offers a rewards program when you activate offers and shop at select retailers with your Google Pay account.
Crypto Support: The decision to support cryptocurrency is still under consideration; at this time, Google Pay does not support crypto.
PayPal is one of the most widely used digital wallets in use. PayPal supports four of the five key attributes to look for in a digital wallet.
Payment Method: PayPal is extremely popular for ecommerce payments. Instead of directly supporting proximity-based NFC payments, PayPal has partnered with Google Pay for that service. It is therefore not usable on wearable tech.
Payment Types: PayPal supports instant between users, and it has two options for transfers between wallets and banks (instant for a fee, or one to three business days for free). PayPal can be used for secure bill payments.
Required Registration: While PayPal doesn’t require an associated bank account, linking a bank account unlocks features like transferring funds. PayPal only supports ATM withdrawals for users with a PayPal Cash Card.
Budgeting Tools: PayPal doesn’t have dedicated budgeting tools, but it has been designed to integrate with third-party software like Zapier to help users manage funds.
Crypto Support: PayPal supports crypto with a dedicated part of the platform.
Samsung Pay is Samsung’s answer to Apple Pay. Samsung Pay supports # of the five key attributes to look for in a digital wallet.
Payment Method: While Samsung Pay supports some app-based ecommerce, it isn’t a payment option for all online shopping. Its primary use is for contact-free NFC payments in brick-and-mortar stores. Samsung Pay is able to be used on wearable tech.
Payment Types: Part of Samsung Pay is Samsung Pay Cash, a digital debit card that unlocks features like instant transfers between users and between wallets and banks. It doesn’t at this time support utility bill payments.
Required Registration: Samsung Pay does not require a bank account, but adding one facilitates transfers between the app and your account. Samsung Pay can be used for ATM withdrawals at participating banks with cardless ATMs.
Budgeting Tools: Samsung Pay Cash has some budgeting tools built into the platform to help manage funds.
Crypto Support: Samsung Pay starting on the Galaxy S22 also serves as a crypto wallet.
Venmo by PayPal is a dedicated peer-to-peer mobile payment system. Venmo supports all five of the key attributes to look for in a digital wallet.
Payment Method: Venmo uses a QR code-based payment system for in-person transactions, and Venmo is accepted by many ecommerce retailers. The QR code is presented and/or scanned from a cell phone; smartwatches cannot use Venmo.
Payment Types: Venmo’s claim to fame is its instant payments between users. But users who have linked a bank account can also transfer funds quickly between wallets and banks. If the recipient accepts Venmo, it can be used for bill payments.
Required Registration: Venmo doesn’t require a bank account, but it must be linked at least with a debit or credit card. The Venmo Debit Card can be used for ATM withdrawals at select banks that have card-free ATMs.
Budgeting Tools: Venmo added budgeting tools in late 2021.
Crypto Support: Venmo has dedicated crypto eWallet support.
M-PESA is the most used payment method in Africa and is extremely popular among the unbanked. M-PESA supports all five of the key attributes to look for in a digital wallet.
Payment Method: Retailers can sign up to be able to accept M-PESA both in-store and for ecommerce. M-PESA works with some smartwatches.
Payment Types: M-PESA users can share funds instantly with other users. Banked users can initiate instant transfers between their eWallet and bank account. M-PESA also supports bill payments.
Required Registration: M-PESA’s popularity is largely due to it not requiring a bank account. Instead, users register at an authorized agent and deposit cash to their M-PESA account. While M-PESA cannot be used for ATM withdrawals, authorized agents can cash out M-PESA digital money.
Budgeting Tools: M-PESA has many money-management services as part of the platform.
Crypto Support: M-PESA technically supports crypto, though it does not work in all countries in Africa.
Walmart Pay is a digital wallet solution ideal for Walmart power-shoppers. Although they are in the same family, Walmart Pay does not work at Sam’s Club. Walmart Pay supports two of the five key attributes to look for in a digital wallet.
Payment Method: Walmart Pay can be used for proximity-based payments in Walmart stores. It does not support NFC payments; instead, customers scan their dedicated QR code when paying. It can also be used for ecommerce on Walmart.com. Because Walmart Pay doesn’t use NFC payments, it does not work on wearable tech.
Payment Types: Walmart Pay cannot be used for transfers between banks and the eWallet. It does not support person-to-person transfers, and the only bill payable through Walmart Pay is for Walmart purchases.
Required Registration: Walmart Pay only accepts credit, debit, and Walmart gift cards. It doesn’t therefore require a bank account. This also means Walmart Pay cannot be used for ATM withdrawals.
Budgeting Tools: Walmart Pay does not have built-in budgeting tools.
Crypto Support: Walmart does not accept any form of cryptocurrency; thus, Walmart Pay also does not support crypto.