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What Is An E Wallet And Why Would I Use One?

Stephen Hart

Stephen Hart

Founder - Cardswitcher

Former - Chief Financial Officer @ Worldpay

With contactless payments quickly becoming the most popular way to pay, there’s no doubt that e-wallets are on the rise. They’re fast, easy to use, and save the need for a bulky wallet stuffed in your back pocket.

An e-wallet (or digital wallet), is an app or integrated mobile software that allows you to make payments with just a tap of your phone. Whether you’re keen to set one up, or just want to know how they work, we’ve covered all the bases in our quick guide below.

How do e-wallets work?

The idea of e-wallets might be daunting if you’re used to cash and card payments, but paying by digital wallet is actually really simple.

Your payment information is saved in an encrypted location, with your card number itself never stored in the app.

The digital wallet then uses electronic software to link up your bank account with the merchant you’re buying from. It works almost exactly like a contactless card, you just might need to provide additional authorisation for the transaction.

How to use one

Using a digital wallet is incredibly simple and takes just minutes to set up. All you have to do is:

  1. Download the e-wallet app of your choice (see our list of the best e-wallet apps available).
  2. Enter your debit or credit card details.
  3. Authorise the use of your details with your bank if required.
  4. Start spending!

Provided that the store you’re paying with is compatible with your digital wallet, you can pay with ease.
paying with digital wallet in coffee shop

Examples of e-wallets

There are a number of e-wallets you can choose from, however your device itself likely has one built to work with it. Mobiles that have digital wallet apps integrated include:

  • Apple Pay - Widely accepted in most stores across the UK, Apple Pay is usable with most contactless card machines. It typically verifies your payments using Touch ID or Face ID.
  • Google Pay - Google Pay works almost identically to Apple Pay, but is designed for Android users. You can confirm payments with your fingerprint or passcode.
  • Samsung Pay - With Samsung Pay you can use Galaxy devices like your smartphone or smartwatch to shop.

However you also get Payment Service Providers (PSP) that can be used as e-wallets. One of the best e-wallets is PayPal.

PayPal is without a doubt among the most popular payment service providers, and widely accepted online as a payment method but not so much in physical stores. If they do accept it, you’ll typically see the PayPal logo on the card machine.

Advantages of an E Wallet

It might feel odd if you haven’t used them before, but there’s a tonne of advantages to using an e-wallet.

  • No stress over forgotten cards - It’s easy to leave the house thinking you’ve got your keys, wallet, etc and later realise it’s still sitting in your kitchen. But with most of us glued to our phones, it’s likely the last thing you’ll forget. With your payment details on your phone, there’s no need to rush back home as you can pay using your e-wallet.
  • Eliminates the need for numerous cards - If you’re a stickler for a budget and like using different cards for specific purchases, it can be a pain to make sure you have all your cards with you. With e-wallets you can store numerous card details all on the one mobile.
  • Fast transactions - Regularly in a rush and hate waiting just to get your change or card back? With contactless e-wallet payments you just tap your phone, check it’s been approved, and you’re good to go.

You can also benefit from using an e-wallet to pay for items online while using your phone.]

Are E Wallets safe to use?

On the whole, e-wallets are just as, if not more, safe than physical cards. The data you upload to an e-wallet gets encrypted, and your card number is never saved in the app. This means that if your phone is stolen, your card number is not accessible.

In addition to this, most e-wallets used on a mobile device require a form of authentication in order to process the transaction. As you’re required to enter your password, or confirm the transaction via fingerprint or facial authentication, it has increased security.

Therefore, if your mobile is stolen, it’s very unlikely the e-wallet would even be usable.


There are so many advantages to using a digital wallet from increased security, to ease of payment.

Ready to get started using your e-wallet? Don’t forget to check out our list of the best e-wallets to find one to suit you.

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Written by:
Stephen Hart

Stephen Hart

Founder - Cardswitcher

Former - Chief Financial Officer @ Worldpay

Stephen brings a wealth of experience honed through years in the financial sector, particularly in the card processing payments industry. His illustrious career spans key roles at PwC, Natwest, and the role of CFO at WorldPay, before going on to found card processing comparison site, CardSwitcher. He is passionate about helping growing businesses to understand the card processing landscape so they can make savvy financial decisions.