The pros and cons of digital wallets
A wallet as a digital purse offers several advantages. But there are also challenges users should be aware of.
Advantages of digital wallets
Fast and easy to use: Whether online shopping or contactless payment at the till, a digital wallet simplifies transactions and reduces waiting times.
Versatility: Digital wallets store not just credit cards and bank account data, but also digital identities, EUDI certificates or loyalty cards.
Integration with other platforms: Some digital wallets can be integrated into apps, online shops and financial platforms, making it easier to access various payment methods.
Support for cryptocurrencies: In addition to traditional payments, some wallets can also be used to manage crypto transactions.
Disadvantages of digital wallets
Dependence on providers: Most wallets are tied to specific companies or platforms, which can limit their use.
Need for a smartphone or computer: Without a compatible smartphone, tablet or app, you can't use the wallet.
Limited acceptance: Not all shops and platforms accept digital wallets as a payment method, especially outside the EU.
Data processing by third parties: Depending on the wallet, personal data may be shared with the provider or financial institutions.
Use cases: mobile wallets in everyday life
Mobile wallets are now more than just a digital purse—they simplify payments in many areas of life and offer additional features for flexible and secure use.
Contactless payments in retail
With a mobile wallet, you can easily pay in supermarkets, restaurants or at petrol stations contactlessly using your smartphone or smartwatch. Just hold the device to the payment terminal to transfer the money securely.
Online shopping without credit card data
Many e-commerce platforms and apps support payments via mobile wallets, so users don't have to enter their credit card number or bank details every time. With services like Apple Pay, Google Pay or Samsung Pay, the purchase process can be completed in just a few clicks.
Digital tickets and boarding passes
You can also use mobile wallets to store digital tickets. Whether for flights, concerts or public transport, many providers allow you to save documents directly in the wallet app and present them contactlessly.
Managing and using cryptocurrencies
Mobile wallets designed for cryptocurrencies allow you to store, send and use digital assets. In some countries, you can now pay directly with Bitcoin or other cryptocurrencies via wallets—whether in a café, online shop or while travelling.
Identity documents and loyalty cards
In addition to payment methods, many digital wallets also store electronic ID cards, EUDI certificates or membership cards. This turns your smartphone into a central wallet for personal data, which is securely stored and always accessible.
How do I create a digital wallet?
A digital wallet can be set up in just a few steps. The setup process is quite similar to creating a crypto wallet.
How to create a wallet for cryptocurrencies
Choose a wallet type that suits your security needs and usage (e.g. self-custodial or hardware wallet)
Find a trusted provider that offers security, ease of use and compatibility
Download the wallet app and set it up based on your selected wallet type
Create your wallet account—this automatically generates a wallet address and private key
Write down the recovery phrase for your wallet and make sure to record the words in the exact given order
Store your access data offline—avoid saving them in the cloud or on your smartphone
Test your wallet with a small transaction to ensure everything works properly
If you’d like to learn more about setting up a wallet, check out our guide on how to create a crypto wallet.
In contrast to a crypto wallet, digital wallets usually don’t require the generation and secure storage of private keys or a seed phrase. Instead, they focus on linking payment data or identity credentials, often via user-friendly sign-up processes and built-in security features.
Our tips for using your mobile wallet securely
To keep your mobile wallet secure, follow these tips:
Use strong security features: Enable fingerprint, facial recognition or strong passwords to prevent unauthorised access to your mobile wallet.
Use two-factor authentication (2FA): Turn on 2FA for added security so your money and card data are better protected.
Only download official wallet apps: Install wallet apps only from the App Store or Google Play Store to avoid scams from fake apps.
Use secure networks: Connect only to trusted Wi-Fi networks to avoid exposing your payments and EUDI data to hackers.
Regularly check your transactions: Monitor your wallet activity to spot suspicious debits early.
Don’t store sensitive data unencrypted: Don’t note down passwords or recovery codes on your smartphone—use a secure password manager instead.
Frequently asked questions about digital wallets
Our FAQ section offers further information and answers to common questions about digital and mobile wallets.
What are the best digital wallets?
The best digital wallet depends on your intended use—whether for contactless payments, cryptocurrencies or digital identities. Here are the most well-known digital wallets and their key features:
Apple Pay for iPhone users: Apple Pay allows contactless payments with an iPhone or Apple Watch and securely stores cards in the Wallet app.
Google Pay for Android devices: With Google Pay you can send money, pay online and securely store credit cards, benefiting from wide compatibility with many banks.
Samsung Pay for contactless payments with Samsung devices: Works similarly to Apple Pay but also supports older terminals via Magnetic Secure Transmission (MST), simulating magnetic stripes for use where NFC is not available.
Non-custodial wallets for cryptocurrencies: Allow secure management of digital assets and full control over private keys.
Wallets with broad crypto support: These digital wallets support various cryptocurrencies and offer access to decentralised applications (DApps).
Ledger Live as a combination of software and hardware wallet: Ledger Live manages crypto assets on a Ledger hardware wallet, offering high security via offline storage.
Are digital wallets safe?
Digital wallets are considered a secure payment method, as they use modern encryption technologies, biometric authentication and two-factor authentication (2FA). However, their safety largely depends on whether the wallet is custodial or non-custodial. While custodial wallets are managed by third parties and rely on their security measures, non-custodial wallets offer full control over private keys—though with the responsibility of securing them yourself.
In general, anyone using a digital wallet should rely on secure networks, regular updates and the protection of sensitive data. Whether a digital wallet is truly secure depends not just on the technology but also on your behaviour as a user.
Are electronic wallets and digital wallets the same?
The terms electronic wallet and digital wallet are often used interchangeably, but there is a slight difference: while digital wallets offer a comprehensive solution for storing and managing payment data, cards and identity credentials, the term electronic wallet is more commonly used for pure payment solutions.
An example of a digital wallet is an EUDI wallet, which stores not just money and cards but also a digital identity according to EU standards. By contrast, an electronic wallet usually refers to payment tools like Apple Pay or Google Pay, which are mainly used for transactions.
More topics around cryptocurrency
Want to know how to create a wallet or what a Bitcoin wallet is? Or are you interested in topics like tokenisation, cryptocurrencies or blockchain technology? The articles in our Bitpanda Academy provide plenty of reading to deepen your knowledge.
