Digital Wallet Options and How They Work

It seems like every time we look up technology is changing. Something state of the art one month, can be considered obsolete just a few months later. And each time technology changes and updates it seemingly becomes more integrated with our everyday lives.

One of these ways is with our finances. Specifically, with how we pay for goods and services. As it becomes easier for cyber criminals to steal credit and debit card information, a technology that has been used globally for years has started to emerge in North America. The digital wallet. 

As this form of payment becomes more popular, it presents businesses like yours with an opportunity. An opportunity to not only stay on top of popular payment trends but to reach previously untapped global markets whose preferred method of payment is with digital wallets.

What is a Digital Wallet?

If you’re not familiar, a digital wallet is a contactless form of payment contained in an app or super app. It allows consumers to pay for goods and services in-store or online through their smartphone, smartwatch, laptop, and tablet. 

Most digital wallets will store credit card, debit card, or banking information in them for a fast, easy, contactless form of payment

Digital wallets have been the primary form of payment in many Asian countries for years. Unlike in North America, where credit cards are king, less than 14% of Asian consumers utilize credit cards. 

But, as Gen Z and Millennials continue to play a bigger role in the economy, they are shying away from credit cards. Instead preferring digital wallets. Increasing the payment form’s popularity in North America.

Speaking of Asian consumers, there’s over 2.3 trillion dollars that they’re spending. And they’re primarily using digital wallets to spend that money. That’s both in-store and online. 

A problem that they run into when they vacation in the states, or come over to attend college, is that most businesses are not set up to take payment from their digital wallets. That is a huge missed opportunity, as Chinese consumers spend 6,500 per person per visit to the United States.

This creates not just friction for these Asian consumers, but potential friction for the businesses they want to spend money with. Not having a point of sale system with an integration to accept their digital wallets could mean the loss of a sale, increased chance of chargebacks, or increased chance of fraud. With Asian digital wallets, chargebacks do not exist. 

Digital Wallet Examples

So what are the different types of digital wallets? Some of the ones you might be familiar with are:

  • Venmo
  • PayPal
  • Apple Pay
  • Google Pay

There are also some you might not be as familiar with but, that are the most popular forms of payment globally, like:

  • Alipay
  • WeChat Pay
  • KakaoPay
  • GCash

Many of these, like Alipay and WeChat Pay, are super apps that are incredibly popular in many Asian countries, like China and the Philippines. These super apps are used for payments to scheduling doctor’s appointments, and everything in between.

How do Digital Wallets Work?

These apps are also the preferred forms of payment for over two billion Asian consumers. Even when they vacation or study in North America. But, unfortunately, many businesses have no way to accept these types of digital payments. Creating friction for Asian consumers when they need to pay for goods or services.

Digital wallets use a few different technologies to process payments. Some use a QR-code, which we’re sure you’re familiar with and is the most popular global solution. They can also use Near Field Communication or, NFC. Or Magnetic Secure Transmission, or MST. 

If a consumer is buying something online, they’ll use their digital wallet simply by logging into it or scanning a QR code on their computer screen with their smartphone.This is the most popular global method of transacting and requires the least upfront investment. PayPal, Venmo, Alipay, WeChat and Kakao Pay leverage this technology. 

Near Field Communication works by allowing two devices placed close together to exchange information. Apple Pay and Google Pay use this technology. This method is more costly to implement and does not allow users to tap into the Super Apps.

Magnetic Secure Transmission generates a magnetic signal, much like when a credit card’s magnetic strip is swiped, and the signal is transmitted to the card reader.

To keep your customers’ information safe, these digital wallets use a built-in security feature called “tokenization.” 

Instead of sending the customer’s credit or debit card information directly to the merchant, the wallet generates a one-time-use token made up of random numbers to process the payment. Keeping your customer’s information safe and secure, much more so than a credit or debit card could.

Are Digital Wallets Safe?

Unlike with a credit or debit card, which can get lost, or have the numbers stolen off of it, the token a digital wallet produces is used to essentially hide the customer’s card number from anyone that might want to compromise it.

Each token can also only be used with a unique, encrypted code that is applied to each individual transaction.

The only real risk that comes with using a digital wallet is losing the device the wallet is stored on. Even then, there are so many different security features in apps and devices these days that the risk is pretty minuscule.


Every year it seems the world becomes more and more interconnected. We are in the middle of watching the global village that Marshall McLuhan predicted blossom in front of our eyes. And as the world becomes more interconnected it creates opportunities for businesses like yours to tap into global markets more easily than ever before.

By integrating Pockyt’s software with your existing point of sale or e-commerce site you can open your business up to the over two trillion dollars of global money waiting to be spent with digital wallets. All at no cost to you. 

We believe so deeply in our product that we will fund the integration to your existing point of sale. Better yet, you only pay us when you complete a sale with one of the digital wallets that we support. Our merchants also save over 60% in processing fees when compared to international credit cards and we have eliminated chargebacks. 

No gotchas, hidden fees, or unforeseen changes. Only transparency. To learn more about the benefits of integrating Pockyt with your current point of sale or e-commerce site contact our team today.