What Is a Digital Wallet and How Does It Work?

However, ClearXchange’s bank-based system has already created a network that has trust and security built-in. The service’s website gives three examples of the sorts of payments that could be made using ClearXchange. Roommates can use it to pay the rent; insurance companies may digital wallet decide to use it to send claim payments. Friends can use it to share the cost of “some great Thai food”. Even that last case study, shows older folk enjoying a meal rather than students who are targeted by Venmo. The service is only available to U.S. members over age 18.

Sign up and create an account with the digital wallet provider if you need to do so. Your customer interacts with the lightbox by authenticating their account and selecting their preferred payment card. A customer that prefers to pay with a digital wallet clicks on their wallet of choice to proceed with payment. Automatically add your TD Bank Visa card to your digital wallet in a few simple taps.

If your phone isn't password-protected, you risk giving someone else access to your finances if you lose your phone. Additionally, there might be local businesses you prefer to shop at that don't yet have a point of sale that accepts this technology. Digital wallets allow people in financially underserved parts of the world to access financial services they may not have been able to before.

You can also manually add a card starting from the digital wallet on your phone or smartwatch. When your card is linked to a mobile wallet, your information is encrypted and your actual card number is not transmitted. The merchant never sees or stores your data during a transaction. Integrate the digital wallet provider into your payment form and include a visual indicator when you display your payment form -- typically, the digital wallet logo. Set up correctly, your customers will enjoy a seamless digital wallet payment experience right on your website, with no need to redirect your customers to a separate page for payment authentication.

This page is intended to help you understand the benefits of digital wallets, how digital wallets work, and the steps for integrating digital wallets into your payment page. Developers should review the full API referencefor complete instructions on how to integrate digital wallets. Instead of redirecting your customers to a Masterpass lightbox, you can make use of Masterpass Hosted to process digital wallet transactions without redirecting your customer to the Masterpass page. Instead, the Masterpass authentication process is hosted on your merchant website.

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A process called “tokenization” — that keeps your credit or debit card number a secret when you make a purchase. Major digital wallets like Apple Pay, Samsung Pay and Google Pay are dependent on the phone you carry. You can’t use Apple Pay on an Android phone, for example. So by sticking to a specific brand of phone, you’ve also chosen a potential digital wallet.