Written by Modulr | Jul 24, 2025 11:00:00 PM
A digital wallet is a software-based payment tool that stores payment credentials, allowing users to make electronic transactions securely. Digital wallets can store credit/debit card details, cryptocurrencies, and loyalty points. Digital wallets enable pass-through payments, where transactions from an underlying funding source (e.g., a card) pass through a third-party interface such as a wallet like Apple Pay, Google Pay, or PayPal, rather than being used directly by the cardholder at the point of sale. Wallets can be pass-through or rely on stored value (like PayPal, Alipay, or M-Pesa, which hold funds). EMI accounts are often seen as a type of digital wallet as the user experience can be very similar, however while an EMI account can be the underlying infrastructure for a digital wallet it is not a wallet in itself, and is instead a regulated financial product that a wallet may sit on top of.