Not every app that stores a payment method qualifies as a digital wallet. In the world of fintech, many companies slap the “wallet” label on products that are little more than glorified account viewers or prepaid card apps. A real digital wallet must do more: it should support payment transactions, store value, handle credentials, and ideally integrate digital identity and security layers.
Digital wallets are applications that store payment information, infraestructure and passwords for numerous payment methods and websites, with capabilities ranging from instant payments to peer-to-peer (P2P) transfers and loyalty integration.
A major point of confusion lies in apps that allow users to see a balance or transfer money between internal accounts, but don’t support external interoperability, tokenization, or biometric security. These apps often lack NFC or QR code payment functionality and fail to integrate digital identity, making them limited financial tools, not wallets.
Who’s Doing It Right?
Apple Wallet, Google Wallet, and Alipay stand out as legitimate implementations. These platforms support biometric authentication, seamless in-store and online payments, storage of transit passes and IDs, and compatibility with open banking APIs. They meet the multi-functionality and security benchmarks outlined by regulators and industry analysts.
The European Standard
Europe is also drawing frameworks and proposing its own solution. The new EU Digital Identity Wallet Regulation sets high standards on what constitutes a digital wallet. Its initiative securely store not only payment credentials but also government-issued IDs, medical records, and other verifiable credentials. It positions digital wallets as critical infrastructure for digital sovereignty and mandates that public and private services must accept them.
Why It Matters
Meanwhile, many early-stage fintechs advertize wallet features but deliver very little. Some store only a prepaid card balance, others don’t allow outgoing payments or integrations. But the difference isn’t just semantic. True wallets can become a cornerstone of open finance, identity verification, and government service access. Mislabeling apps undermines user trust and opens the door to cybersecurity risks, as limited apps often cut corners on authentication protocols.
As consumers get more educated—and regulators more assertive—the market will likely purge the fakes. The EU’s new law is a step toward that, but the US and other markets still operate in a grey zone. Until then, the burden falls on journalists and users to call out apps that promise a wallet but deliver a piggy bank. Or worse, a spreadsheet.
