5 Reasons Digital Wallets Are Essential For Your Large Enterprise

Digital wallets, which can be used for both online and in-person transactions, are growing in popularity. Learn about your options and how they could benefit your business.

In 2021, digital and mobile wallet payments accounted for 49% of online transactions worldwide, a share that is expected to keep growing. They had the highest market share in the Asia-Pacific region, at 69% of all ecommerce payments, and accounted for 29% in North America and 27% in Europe.1 The growing popularity of digital wallet solutions could be why 73% of merchants plan to accept more types of digital wallets.2 So how does each digital wallet software solution work? And which should you offer?

What is a digital wallet and how does it work?

A digital wallet is an app, software program, or online service that allows customers to make electronic payments to another party without having to use a physical card. They can be used for both online and in-person transactions. Some digital wallets also allow customers to make peer-to-peer payments.

To use a digital wallet at point-of-sale, the customer simply pulls up the app, verifies their identity, and scans a code or taps their phone on a terminal. There are three main types of fintech for digital wallet solutions:

  • Quick response (QR) codes: QR codes can encode specific information like the transaction amount or the intended recipient. The customer scans the code and is automatically brought to the digital wallet app to complete the transaction. This is how PayPal in-person transactions work.
  • Near-field communication (NFC): NFC uses electromagnetic signals to share data between two items in close proximity. This is how many tap-to-pay terminals work. Using a specific frequency, an NFC-enabled terminal and a smartphone can pass payment information back and forth in seconds.
  • Magnetic secure transmission (MST): This is the traditional magnetic stripe on credit and debit cards. Some smartphones can generate a similar magnetic signal that can be used by digital wallets to pay at traditional credit card terminals.

The process for using a digital wallet online is similar to that of a credit or debit card, but typically faster. At checkout, the customer will choose their preferred digital wallet payment solution. From there they will either be redirected to the digital wallet app or a lightbox will pop up where they can verify their identity. The digital wallet authorizes the transaction and sends a payment confirmation to the website.

Digital wallet vs. mobile wallet

The terms “digital wallet” and “mobile wallet” are often used interchangeably, however there is one distinction. “Digital wallet” typically refers only to monetary transactions backed by a credit card, debit card, or bank account, while a mobile wallet can also include other information such as your driver’s license, loyalty numbers, tickets, boarding passes, and even hotel room keys.

Digital wallets are typically used for online transactions from laptops and smartphones, while mobile wallets are used for in-person purchases, often from a phone or a smartwatch. Because most mobile wallets are also digital wallets and vice versa, we’ll use the term “digital wallet” to encompass both types here.

Are digital wallets secure?

Today’s customers seem to be increasingly concerned about security. In one survey, 73% of consumers stated that they prefer to share credit/debit card details with as few retailers as possible, and 61% stated that they don’t save financial details with retailers or brands because they do not trust them with the data.2

They may be reassured by the fact that digital wallets encode their card information using tokenization. This means that rather than sending the information to the business, digital wallets create a token to be used for the purchase. Since businesses don't receive card data, it is more difficult for fraudsters to intercept this information.

Many digital wallets also use two-factor authentication, encrypted keys, and one-time-use PINs to help prevent fraudulent logins. While it's important customers still take security measures, for example locking their phones, using a digital wallet may not be any riskier than using a credit or debit card.

Digital wallet payment solutions

Digital wallet solutions are easy to use and help reassure customers that their information won't fall into the wrong hands. It's no wonder they’ve proliferated over the past decade, and today's large enterprises have many options to choose from. Here are some of the top digital wallet companies.


PayPal is one of the most accepted digital wallet solutions, with more than 75% of the top 1,500 largest online retailers across North America and Europe utilizing PayPal at checkout.3 It also reaches across many demographics and around the world, with 432 million active global accounts across 200 markets. The PayPal Wallet is optimized for online and mobile purchases, while customers can also pay in store in the United States using merchants’ personalized QR codes.


With a user share of 34%, Venmo is the second most used online payment service in the United States.4 It’s a peer-to-peer (P2P) payment app available on both iOS and Android that allows customers to exchange funds and split costs with friends. It's free for customers to use the P2P function as well as to pay its more than 2 million participating merchants.5 Venmo provides a frictionless experience on desktop, mobile, and in-app, and also has a social component through which customers can share their purchases with their friends.

Google Pay

Google Wallet was one of the first digital wallets on the market, and gives customers the ability to store their license, tickets, boarding passes, and even digital car keys.6 Google Pay is the portion of Google Wallet that stores card information and allows customers to make payments. They can make contactless in-person payments, peer-to-peer payments to friends and family, as well as online payments, using either Android or iOS operating systems.7

Apple Pay

Apple has its own version of a digital wallet and payment system. It's automatically built into iPhone, Apple Watch, Mac, and iPad, so Apple users don't even need to install an app — all they have to do is add their card information. Customers can use Apple Pay for in-person purchases at retailers with just a tap of their phone, as well as online purchases through the Safari web browser on an iPhone, iPad, or Mac, without even needing to leave the page.8

Samsung Pay

Samsung Pay is the digital wallet solution that comes with Samsung Android devices. Customers just add their credit or debit card, then use a fingerprint, PIN, or iris scan to authenticate online purchases. They can also purchase, share, and use gift cards and make in-app purchases. Samsung has even partnered with New York City’s MTA system and Portland’s TriMet system so customers can ride with just a tap — no need to unlock their phone or open an app.9

Mercado Pago

Mercado Pago is a popular Latin American digital wallet solution based in Argentina. In 2021, about 3.3 billion payment transactions were made via its digital wallet software — nearly 70 percent more than a year earlier.10 The app is available in seven countries: Argentina, Brazil, Chile, Colombia, Mexico, Peru, and Venezuela. Mercado Pago also offers point-of-sale machines as well as QR codes.11


Satispay is an Italy-based payment network that uses International Bank Account Numbers (IBANs) to connect its smartphone app to a bank account, so it isn't linked to specific credit or debit cards. It’s also a prepaid digital wallet solution that works with many prepaid cards.12 It works in any country that is part of the Single Euro Payments Area (SEPA), which includes 36 European countries, except for Vatican City, Croatia, and Iceland.13

Digital wallet benefits

As more and more businesses offer digital wallet solutions, the benefits are becoming clear. Here are the top ways digital wallets can help your business grow.

Reach new audiences

Unlike traditional currency, digital wallets can help enterprises overcome both geographical and language barriers, making global ecommerce payments easier. PayPal, for example, is available in over 200 markets and supports 25 currencies. For online and in-app purchases, Apple Pay is available in 83 countries14 and Google Pay in 75 countries.15 You can also offer digital wallets like Mercado Pago that customers in certain regions may be more comfortable with.

Digital wallets could also help you reach new demographics. They're largely trusted by younger generations, with 48% of millennials and 46% of Gen Z stating that they trust digital wallets.16 Many digital wallets skew younger, for example in the US, 58% of Venmo users are between the ages of 18 and 39 years old.17

Help drive conversion

Customer expectations are high, and if enterprises don't offer the payment options they want, they may go elsewhere. In one study, 35% of consumers stated that they abandoned a purchase because their preferred payment method was not available.2 This could be even higher for digital wallet users: On average, 46% of digital wallet users are likely to abandon a purchase if they cannot use a digital wallet on a merchant's website.18 To help your business capture every conversion in a competitive market, digital wallets may be a must-have.

Provide a frictionless experience

Payment methods aren't the only things customers may be looking for: 18% of consumers report abandoning their cart because the checkout process took too long.19 Most customers don't like lengthy forms, gated checkouts, and lots of clicks to make their purchase, especially on mobile.

Reducing friction with digital wallet payment solutions could in turn reduce your churn rate. For example, the churn rate for PayPal digital wallet users is 25% less than the rest of PayPal consumer base.20

Help increase authorizations

Frictionless checkout applies behind the scenes as well. Digital wallet solutions may result in higher transaction approval rates than traditional credit or debit cards because payment tokenization standards mean that underlying card details can be automatically renewed. There are also fewer errors from customers entering invalid data.

Approvals may be directly related to revenue: 33% of surveyed business decision makers strongly agree that higher authorization rates can lead to more completed transactions and higher revenue volumes.21

Integrate easily and stay flexible

Some enterprises may be hesitant to implement new technology because of perceived difficulties in integration and costs. In one survey, 37% of respondents said they face integration challenges in modernizing their technologies.21 Yet the process of integrating digital wallets may not be as difficult as you think.

Integrating PayPal Checkout, which includes the PayPal Wallet as well as PayPal Pay Later and debit and credit cards, involves adding a simple JavaScript SDK code to your checkout page. With the full Braintree SDK, built for large enterprises with international scale, you can easily add more payment methods, including digital wallets such as Apple Pay and Google Pay.

Which digital wallet is best?

If you don't yet offer any digital wallet solutions, it's easy to see why this could be a good option for you. But with so many options out there, you're probably wondering which digital wallet is best. The answer may depend not only on where you do business now and the demographics that make up most of your target audience, but also on your plans for business growth.

If you want to expand your global reach, PayPal's 432 million active global accounts are a good place to start. To reach younger demographics in the US, Venmo can help. And it's always good to have a payment processing platform, like PayPal Braintree, that allows you to easily add new digital wallet solutions and other payment methods as you grow.

Download our white paper on The Future of Enterprise Payments for a deeper dive into why digital wallets and other digital payments are key to business growth and how your payment platform can help you leverage them.

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