What is a Mobile Wallet?

A mobile wallet is a virtual wallet that stores your credit or debit card information and cash balances. It is accessible through a mobile wallet app that is installed on a mobile device like a smartphone or a tablet or via a USSD code. You can use it to make in-store payments without having to give out your information every time you want to make a payment. It is possible to have a mobile wallet without a bank account or a mobile wallet with bank account, especially with virtual banks.


Mobile Wallets Benefits

  • Convenient. Mobile wallets are convenient for making in-store payments. You do not need to carry money around to make in-store or online purchases.
  • Incentives and promotions. Some mobile wallets come with promotions and incentives like discounts and cashback, giving you one avenue to save money.
  • Easy to load money. Mobile wallets allow you to add multiple debit and credit cards which you can use to load money. You can also save this information in your mobile wallet and you do not need to look for this information when making payments.
  • Security. Mobile wallets help to reduce theft since mobile wallet apps are usually encrypted. In many parts of the world, payments are made in cash. Mobile wallet accounts are transforming payment means by providing a place to securely store your data while you can also make payments.

Types of Mobile Wallets

There are three main mobile wallet types:

Open Wallets

An open wallet is the one used by a bank or a third party such as PayPal. Open wallets allow you to buy goods and services and withdraw cash through banks or cash transfers. You can use the funds in it to make in-store payments and online purchases. Also, you can withdraw the money in the wallet in cash.

Closed Wallets

A closed wallet is issued by merchants and can only be with those specific merchants. You cannot use it to make payments or transfer money to any other party apart from the specific merchant. You cannot use it to withdraw money in cash. Closed wallets are used to promote customer loyalty by ensuring that you can only buy from a particular merchant. An example of a closed wallet is Walmart Pay.

Semi-Closed Wallets

A semi-closed wallet offers some flexibility by allowing you to make payments to multiple merchants. You can use semi-closed wallets to withdraw funds into a bank account. However, you cannot withdraw funds in cash.


How Mobile Wallets Work

The first thing is to select your preferred mobile wallet. Then you can set it up and start to use it to make payments. Download the app on your mobile device and then add your bank account, credit or debit card information to the wallet. You can add multiple cards into your wallet but only one card will be selected as default. To use a different card, you must change to a different card to make a transaction.

Before shopping, it is important to know if the merchant accepts your mobile wallet. You can always check from the wallet on the listed merchants that accept the mobile wallet. To make a payment, the user should wave or tap the device. Then a message is sent to the merchant. The merchant must honor the message alert to complete the transfer from the user’s account to the merchant’s account.

Mobile Wallets Examples

Some examples of mobile wallets include Google Pay, Apple Pay and Samsung Pay.

Google Pay Wallet

Google Pay digital wallet allows users to make payments and money transfers. Google Pay wallet app is free and users can use it to store credit debit card, bank account, gifts and loyalty card information. You can use it to make online payments at eCommerce stores or contactless payments at physical stores.

Google Pay is available to people using both iOS and Android devices. Transactions are identical to those of a debit or a credit card, only that they go through Google. Google Pay also issues physical cards. Google Pay does not charge fees to transfer funds to/from your bank account. You will pay a fee of $0.31 or 1.5% of the total transaction (depending on which is greater) to transfer money to family or friends with Google Wallet. Your credit card provider may charge fees for using Google Pay. However, you will pay a 2.9% fee when you use a Google Pay card in a store.

What is Chase Mobile wallet? This was a mobile wallet that was offered by JPMorgan Chase. However, the wallet has been officially shut down.

Apple Pay

Apple Pay app is a mobile wallet funded by a linked credit, debit card or bank account. It allows users to make payments using iPhone, iPad, Apple Watch, or Mac. Payments must be approved through a passcode, Touch ID, or face ID. Apple Pay wallet accepts a majority of the credit and debits cards like Visa and MasterCard. Apple Pay wallet is accepted by many contactless payments and you can use it to pay where you see their symbol.

There are no Apple Pay fees for example when it comes to registering on Apple Pay and transferring money to another Apple Pay user. Also, there are no Apple Pay fees when using a debit card.

PayPal Mobile Wallet

PayPal is a mobile wallet that you can use to send money, make in-store payments and keep track of your spending. You can fund your PayPal digital wallet with a liked bank account, debit or credit card. PayPal users can use the PayPal wallet app or PayPal MasterCard to make in-store payments. In 2020, PayPal launched mobile wallet for cryptocurrency as well.

Samsung Pay

Samsung pay app was launched in 2015 and is available to Samsung devices. It uses NFC and MST technologies to make payments. Samsung Pay mobile wallet is accepted by merchants with contactless payment terminals. The difference between Samsung Pay wallet and other mobile wallets is that users can use it to pay using traditional non-contactless terminals.


Venmo app is a mobile wallet owned by PayPal. Venmo digital wallet allow users to pay for goods and services as well as transfer funds to others using a mobile phone app. In addition, the platform offers its customers Venmo prepaid cards (Visa). The company has also launched Venmo cryptocurrency accounts for its users to buy, hold and sell cryptocurrencies on Venmo crypto app.

Venmo is only available in the United States and only compatible with U.S. based bank accounts and phone numbers. Read our review of Venmo.

Walmart Pay Mobile Wallet

Walmart Pay was rolled out in 2015 by the ecommerce store Walmart to allow customers to buy using the mobile wallet from its stores. It uses QR code function to make payments. It is available to Android and iOS users and can support all cards. You must first download and open the Walmart app to use Walmart Pay. When you purchase using the Walmart App, a QR code and Walmart pay logo will appear on the credit card machine. You need to scan the QR code using the Walmart Pay app to make a payment.



Mobile wallets are becoming popular around the world because of their convenience in sending money and making online and in-store payments. Some of them charge no fees for most transactions while others charge very minimal fees compared to other payment or money transfer methods.