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Digital Wallet App Development Guide 2023
successive.tech/blog/digital-wallet-app-development-guide/
With the massive adoption of smartphones and how handy they come for people from all
walks of life, mobile payment options are becoming mainstream all across the globe. A
digital wallet or e-wallet is one of the popular contactless payment methods used by
people to handle their money digitally.
According to Statista, mobile wallets are already a preferred payment method in e-
commerce among people in the U.S. Whereas ApplePay and GooglePay will lead the
future of mobile payment where the number of people who use Apple Pay is expected to
grow by nine million between 2022 and 2026.
If you are a business owner looking to increase your offerings and convenience for your
target audience or a startup wanting to be a part of a market that has highly exponential
growth in the future, digital wallet app development at this time would be a lucrative
option.
In the following blog, we will reveal all critical aspects of what it takes to create a digital
wallet application like cost, top features, processes, security & compliance integration,
technology stack, and others so that you can set the right foundation for your payment
app development business.
Table of Content

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What Is Digital Wallet?
A digital wallet is a software application that serves as an electronic version of a physical
wallet. With a digital wallet, you don’t need to carry along your physical wallet while going
out or filling out your card details. All you need is your smartphone with a mobile
application downloaded from a digital wallet and it ensures you have a faster and easier
transaction process at eCommerce sites, merchant shops, malls, and other places from
where you want to buy something or need to transfer money for any reason.
To use a digital wallet, all you have to do is to download the application to your
smartphone and register your debit or credit card details within the application. These
applications store your financial information in a form of a token along with your device
number known as a cryptogram as a virtual identification number. These tokens and
cryptograms are further used by digital wallet applications to validate your identity when
you want to send money to someone or pay for buying something with the application.
Digital wallet applications remove the need to insert the card into POS terminals or swap
them and enter security pins. These applications promote contactless payment along with
excellent security, making them the most popular and highly convenient choice to do
payment anywhere. According to industry experts, mobile wallet application development
is just the beginning of a new era. Besides storing payment methods, FinTech leaders are
also developing a complete ecosystem of digital wallet applications. It wouldn’t be wrong
to say that digital wallets will remove the need for physical wallets in the upcoming time
as these wallets are also designed to hold a wider range of digital items people used to
carry within physical wallets, including:
Gift cards
Loyalty cards
Coupons
Reward points
Driver’s licenses
Plane tickets and boarding passes
Event tickets
Membership cards
Insurance cards
Coupons
Hotel and restaurant reservations
If you are still not convinced why you should jump onto building a digital wallet app, as a
digital wallet app development company we would like to discuss with you the advantage
of digital wallets for both businesses and customers. Let’s explore a few of them:
Advantages Of Digital Wallet For Customers
Convenience: Mobile wallets enable transactions to be completed instantly without
waiting in long lines or going to an ATM to withdraw cash.

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Easy & quick: With a mobile wallet, you don’t always need to keep entering your
card number, expiry date, and CVV, to do transactions. Just pick up your phone,
scan the QR code and you are done. It’s that easy!
Easily accessible: Since a mobile wallet resides within your smartphone, it’s
always accessible and supports day-to-day transactions faster and more easily.
Wide range of users: The reach of mobile wallets has gone far and wide as it can
be used for bill payments, water, electricity, water, flight tickets, buses, trains, and
many other things.
Never miss a payment: You can also enable autopay within your mobile wallet and
it will pay your bills on the specified date. This lets you go about your dates hassle-
free.
Security: Your wallet can be stolen, but your mobile wallet can not. Even in the
case when you lose your phone, your mobile wallet has security settings that enable
only you to access it. Additionally, when data is transmitted via mobile wallet for
making payments, the account number isn’t communicated. Instead, encrypted
payment codes or tokens are sent and received to ensure security.

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Advantages Of Digital Wallet Development For Businesses
Better customer experience: Mobile wallets streamline the checkout process by
providing fewer click-throughs and auto-fill forms. This in turn drives up conversion
rates – a win-win for businesses and customers alike.
Secure financial detail: Protecting cardholder details is vital for your business, as
any security breach can create a serious hit to your reputation. Digital wallets add
an additional layer of security with the use of biometrics like fingerprint and face
recognition technology and secure users’ financial data.
Serve as an alternative payment option: Mobile wallets can be used as an
alternative payment option for customers as not all customers like carrying cards or
cash especially Generation Z. Having a contactless payment option in place allows
you to accept payment from the new generation people who are always in a hurry or
prefer digital means for everything. Digital wallets also allow you to accept
payments like Bitcoin or direct PayPal payments.
Insights into customer shopping habits: Digital wallets help a business beyond
payment transactions. It also provides real-time data analysis of customers’
shopping histories and preferences, which facilitates a more targeted marketing
campaign. Using the same, a business can also manage inventory and create more
accurate budgets.
How Do These Digital Wallet Applications Work?
Since this post is dedicated to helping you understand how to create a digital wallet, it is
also important to discuss how these digital wallet applications work. Here is the following
steps performed by the user to use the application:

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A user downloads the digital wallet application.
The user registers his card details into the application.
The application stored the bank or card details in an encrypted way.
To pay with a digital wallet, the user passes his authentication based on his OS
device.
He holds his smartphone close to the contactless terminal or pays using his mobile.
number by authorizing the transaction with further security processes implemented
within the application.
In order to complete this cycle, there are several technical processes that work behind the
mobile wallet application to make the transaction work such as quick response code,
near-field communication (NFC), and magnetic secure transactions (MST). While working
together as a complete payment processing cycle, digital wallets offer users a faster,
more secure, and satisfactory payment experience.
As an experienced fintech app development company, we help you (startups and
companies) build and customize mobile wallet applications based on your unique
business needs. Let’s know these technical processes in detail to understand how these
are enabling payment through a mobile wallet and fostering contactless payment culture.
Quick Response Codes or QR Code
QR code is a type of machine-readable code or barcode that typically stores information
as a series of pixels in black-and-white square format. These barcodes are readable by a
camera of a smartphone and this thing has unlocked an entirely new way to make a
payment.

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When scanned through a smartphone camera, it directs the user to access the relevant
information and make hassle-free payments online. QR codes are truly a multifaceted
shortcut to the internet with which within a few seconds users can make a contactless
payment with zero effort, enabling a stress-free customer experience.
Near Field Communication (NFC)
Near field technology or NFC is a method of wireless data transfer that uses
electromagnetic signals to enable smart devices like smartphones, laptops, tablets, and
other devices to share and transfer data when in close proximity. Using NFT in developing
digital wallets allows you to power wallet users (sender) and businesses (receiver) for
contactless payment processes.
However, near field communication payments require the merchant’s terminal and
customer’s device to be NFC-enabled. Meaning, the sender and receiver have to be
within an inch and a half of each other to connect, which is also a better option to send
and receive payment securely.
Magnetic Secure Transmission (MST)
Magnetic secure transmission is another mobile payment and wireless technology that
replicates payment with both traditional pre-chip magnetic stripe systems and modern no-
swipe credit card terminals. If you aim for digital wallet mobile app development,
especially for the United States, make sure to enable MST digital technology within the
application.
The US is notoriously slow in adopting new payment technology i.e. NFC. If you are
expecting a quick spike in the adoption of your mobile wallet payment application, you
must enable both NFC and Magnetic Secure Transmission (MST) technology as
approximately 90% of merchants were accepting MST in 2022. It makes your application
work with nearly all merchant payment terminals.
Types Of Digital Wallet Applications
Interestingly, there are multiple options available for mobile wallet app development. You
can go with the one that addresses your business model, target user’s needs, location,
and device’s operating system. For example, Apple Pay is a good option for iPhone users
whereas Google Pay is best for users having android devices. While others use PayPal
since it provides international-level acceptance. Apart from this, Venmo and Cash App
work only with a valid US phone number. These are some considerations that you must
decide beforehand for developing a modern and successful digital wallet application
business. We can segregate these applications into different digital wallet categories,
offering different conveniences to different users. Let’s check different types of e-wallets
that can be developed.
1. Closed Wallet

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Closed wallet applications are applications that allow users to make payments through
the application or website. But these wallets are developed by businesses that sell
products or services and allow the business users to use the provided wallet for payment.
In case of a canceled transaction or refund, the whole amount is credited back to the
wallet that you can’t use on another platform or with other businesses.
2. Semi-Closed Wallet
A semi-closed wallet like Apple Pay or Google Pay can be developed and used as an
integrated payment system between a business and a user. Semi-closed digital wallet
software development allows you to play the role of an integrated payment system
between merchants and customers. Whereas merchants agree to a contract or
agreement with you for using the application, customers have to provide their personal
details like bank or debit card number, location, and other identity verification including
generating pins to ensure secure payment transactions.
3. Open-Wallet
Open wallet applications are designed to support any type of transaction. These types of
wallets can be used to transfer funds and send to receive online and in-store payments. If
you are developing an open wallet, make sure you facilitate transactions that can be done
from anywhere in the world. These types of wallets require both sender and receiver to
have accounts on the same application.
4. Cryptocurrency Wallet
Crypto wallet development refers to developing applications that store and transfer
cryptocurrencies. These wallets store user’s public and private keys also known as
ownership certificates for facilitating transactions over its application.
Key Features To Include In Digital Wallet App Development
Just like any other digital application, digital wallet features also happen to incorporate
three panels that address different needs of different users of the application. It includes a
user panel, merchant panel, and admin panel. Let’s know them below.
User Panel Features
Signup via Social Login
User authentication via pin, pattern, and Face ID
Add authorized bank account
Check account balance
Transfer money via contact number or QR code scanner
Pay bills and set a bill payment reminder
View transaction history
Multi-currency & multi-language support
Chat support

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Push notifications
Merchant Panel Features
Log in to an interactive dashboard
Add/manage products
Create/edit profile
Account verification via pin, pattern, and Face ID
Manage customers
Add promotional offers & discounts
Offer loyalty points and rewards
Manage staff and employees
POS integration
Payment link generation
Admin Panel Features
QR code generation
Manage users & merchants/vendors
Real-time analytics
Enhance the app’s security
Reporting & auditing
User and merchant data control
Transaction management
App support and maintenance
Dashboard management
Manage offers
Step-By-Step Guide For Digital Wallet App Development
A digital wallet app development comprises the same process a digital product
development process incorporates. It begins with discovery, UI/UX designing,
development, testing, deployment, product launch, and maintenance and support. Let’s
check each phase in detail and understand their significance in digital wallet app
development.
Step 1. Product Discovery
The first step of developing a mobile wallet application is discovering or identifying the
project scope. With the help of a full-cycle mobile app development company, you can
validate the business idea of developing an e-wallet application, test the idea with target
users, and the technical requirements necessary to build a successful application
product. This phase provides you with a better understanding of the complexities often
involved in digital wallet system design and solution development. At this stage, each
team member engages effectively with the appropriate technology stacks to validate the
technical and business feasibility of the product idea.

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Step 2. Designing
In this phase, an application development company helps you give a look and feel to your
e-wallet by developing a user interface and user experience for your application. It will
give an intuitive and visually appealing application for the user to use and test it. You can
decide and build a brand logo, application icon, button, and other digital wallet features to
differentiate your product from the competitors. It will serve as a design blueprint that will
be used further by developers to code the application modules and establish
functionalities between them to define a final product.
Step 3. Development And Testing
Application development and testing represent the most technical aspect of the process.
Depending on the quality of the UI/UX, the development team deploy technology stacks,
set up CI/CD, and test and validate whether the product behaves as it is supposed to.
Step 4. Digital Wallet Application Launch
Since mobile wallets are mobile applications, these are also required to be hosted on top
play stores such as Google Play and Apple Store. This way, you make your application
available for download for the targeted users based on their respective operating
systems.
Step 5. Maintenance And Support
Application development is a one-time job, but keeping it updated according to market
needs comes under maintenance and support which is an ongoing process. Your digital
wallet development company also helps with application maintenance and provides
support to keep the application updated, active, and high-performing while resolving
errors or bugs if occurred after launch.
Popular Technology Stack Used For Digital Wallet App
Development
Backend Development PHP, NodeJS, Python, Java, etc.
Frontend Development Kotlin, Swift, CSS, Bootstrap, HTML 5, Vue.js, React.js,
Angular, etc.
Database Development MongoDB, Apache Cassandra, HBase, MySQL, Postgres,
etc.
Cross-Platform
Framework
Ionic, React Native, Flutter, Xmarian, etc.
QR Code Scanning ByteScout BarCode, ZBar Code Reader, etc.
Analytics Amazon Kinesis, Apache Kafka, Spark, Flink, etc.

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Cloud Services Google Cloud, Azure, Salesforce, Amazon Web Services,
etc.
Push Notifications Amazon SNS, Google Firebase, etc.
Geolocation Google Maps API (Even for iOS applications)
Payment Gateways PayPal, Stripe, Braintree, QuickPay, etc.
Security Compliance For Digital Wallet Application Development
Despite the growing popularity, developing an android virtual wallet or iOS virtual wallet
from the ground up requires considerable effort and time in putting them in alignment with
regulatory compliance. According to Payment Card Industry Data Security Standard (PCI
DSS), it is important to secure cardholders’ information wherever it is stored. A successful
digital wallet is one on which customers rely on the security structure, its commodity, and
ease of use. To ensure great product delivery and performance of your mobile wallet
application, you must implement the following security and regulatory structure to your
digital wallet.
Ensure Data Privacy Compliance
You must comply with the best practices for implementing data privacy regulations
according to the state or region you want the application to be operated. Some of the
common regulations and compliance important to implement are General Data Protection
Regulation (GDPR) and the California Consumer Privacy Act (CCPA).
Multi-Factor Authentication
You must implement an additional layer of protection to your digital wallet application by
implementing multi-factor authentication. For example, an iPhone application uses face
recognition, pin, and password as well as device number to validate the authentication of
the user.
Secure Data Transmission
In the digital world, you are required to secure data even in transit. To provide a secure
and faster transaction experience on your application, make sure your developer has
implemented SSL/TLS/VPN encryption. These encryptions allow secure data
transmission between the application and the server.
Secure Data Storage
You must secure user data and their financial information such as credit card details at
rest as well. There are secure storage methods used such as encryption, hashing, and
others that protect user’s personal information from fraudulent activity and access.
Regular Security Audits And Updates

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With increasing cybersecurity incidents and information leaks, there is constantly growing
regulatory and compliance around cybersecurity and an evolving technological
environment. The consequences of data breaches are having a great reach in the
financial sector, leading to higher fines and litigation. Henceforth, you must keep your
digital wallet application on regular security audits to identify vulnerabilities and implement
timely security updates.
7 Most Popular Digital Wallets Across The World
The digital wallet space is crowded and getting bigger. Companies like PayPal and
Venmo offer digital wallet products and enable users to pay for purchases online and in
person using their respective applications. Additionally, many banks and credit card
companies have introduced digital wallets for android and iOS devices with personalized
functionalities that can only be accessed within their mobile apps. Since both customers
and businesses are fostering a contactless or self-service culture around the world for
payment transfer, here is a list of the top 7 digital wallets in closed, open, semi-open, and
other categories used across the world.
Apple Pay
With 92% of digital wallet transactions in 2020, Apple Pay has emerged as a leader in the
digital wallet space. Apple has introduced its wallet for iPhones, iPads, and Apple
Watches.
Google Pay
Google Pay has maintained its leadership in the digital wallet space by having 100 million
users.
Amazon Pay

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Amazon has a very popular and widely accepted digital wallet in the world all thanks to
being the third largest company and a fixture in ecommerce.
PayPal
PayPal’s digital wallet builds on its long history in online payments, and supports
international transactions with almost all types of cards.
Click to Pay
Click to Pay was an amalgamation effort of Visa, American Express, Mastercard, and
Discover. It came as a unified online payment system and works with almost all major
credit cards.
Alipay
Alipay by Alibaba Group is a leading China-based digital payments platform. It had more
than 1.3 billion active users in June 2020 and processed $17 trillion worth of transactions
in China per year.
WeChat Pay
WeChat Pay is China’s other top digital wallet with over 900 million users.
List Of Industries That Benefit From Mobile Wallet Application
The adoption of mobile wallet applications has been a game-changer for various
industries, helping them cater to the changing preferences and habits of customers. With
payment app development, industries such as retail, banking, travel, and transportation
are transforming themselves by enhancing the checkout experience to provide a more
secure and seamless payment option. Let’s take a closer look at how these industries are
leveraging mobile wallet applications to improve customer experience, drive sales, and
stay ahead of the competition.
eCommerce
Ecommerce leverages digital wallets to offer secure and convenient payment options,
streamline checkouts, and collect real-time data on customer spending habits for targeted
marketing. This method also provides additional security with biometric authentication
and encrypted payment codes, catering to customers who prefer cashless transactions
and improving conversion rates.”
Banks
Banks leverage digital wallets for a convenient and secure payment method, allowing
customers to manage finances and make payments from their mobile devices. Biometric
authentication and encrypted payment codes provide additional security. Digital wallets

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expand services to reach unbanked customers, offering a seamless and modern banking
experience.”
Travel And Transportation
The travel and transportation industry leverages digital wallets for a seamless payment
experience, enabling customers to book and pay using mobile devices without cash or
physical payment cards. Biometric authentication and encrypted payment codes offer
secure payment methods. Digital wallets improve customer experience and cater to
cashless transactions.
Retail
Many retail stores are accepting digital wallets as a payment option to provide customers
with a faster, more secure checkout experience. Digital wallets also allow retailers to
collect valuable data on customer spending habits for targeted marketing campaigns.
Food Delivery
Food delivery services and restaurants are using digital wallets to streamline the payment
process for online and mobile orders. Digital wallets enable customers to pay for their
orders quickly and easily without the need for cash or payment cards.
Entertainment
Digital wallets are becoming more prevalent in the entertainment industry, with many
companies accepting them as a payment option for ticket sales, online subscriptions, and
in-app purchases. Digital wallets also offer a more secure payment method for customers.
Healthcare
Digital wallets are being used in the healthcare industry to enable patients to pay for
medical bills and insurance premiums conveniently and securely. They also allow
healthcare providers to streamline payment processing and reduce administrative costs.
What Is The Cost Of A Digital Wallet App Development?
A digital wallet app development cost depends on several factors such as application
features, development time and stages, developer’s location, application’s hosting,
business model, and others. Therefore, it is highly recommended that you first discuss
the project roadmap and list of core features with your digital wallet development
company as it helps you get a detailed estimation for the product development. Still, to
give you a better picture of what constitutes to digital wallet app development cost, here is
a detailed list of contributing factors:
The platform or smart device for which you want to develop the application
Application’s core features and complexity
Developer’s experience and expertise

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UI/UX development cost
Hosting and infrastructure costs
Number of screens you want to address
Application testing and post-app launch maintenance and support
Developer’s location, team size, and taxes
However, the cost to build a digital wallet for Android often ranges between $20,000 and
$50,000. On the other hand, going with a mobile wallet app development for iOS ranges
between $30,000 to $60,000. These numbers provide a rough estimate of wallet app
development but it could increase based on the features and functionalities you would like
to be added to your application.
Also read – How Much Does It Cost to Make an App?
Conclusion For Digital Wallet App Development
When you are creating a digital wallet, it’s important to consider how people will use it and
what features it should have. You’ll need to choose the right type of app for your target
audience. And most importantly, you should focus on making the customer experience as
enjoyable as possible to encourage people to use your digital wallet. To stand out from
other digital wallets and capture a larger market share, it’s important that you collaborate
with an experienced digital wallet application development company like Successive
Digital.
We have helped clients with complete payment application development and integration
support, hence can help you to plan and strategize every step of your product
development and launch process. By leveraging our expertise and support throughout the
development process, you can expand your payment options and improve customer
experience.