What is a digital wallet?

Digital wallets are becoming increasingly popular in Ireland, making up over half of all contactless payments and exceeding €12 billion in transactions in the year to March 2024*. But how exactly do these apps work, and what makes them so popular? On this page, we answer some of the most commonly asked questions, exploring the different types of digital wallets, their advantages, and security considerations.

A digital wallet, also known as a mobile wallet, online wallet, electronic wallet, or e-wallet, is an app or online service that lets you securely store your payment information on a digital device. Instead of carrying physical debit cards or credit cards around with you, you can use your phone or smartwatch to make payments whenever you see the contactless sign.

Electronic wallets can also store digital versions of loyalty cards, public transport passes, boarding passes, event tickets, and gift cards (provided the wallet accepts them). Usage is becoming increasingly common, with recent data* showing that almost 454 million mobile wallet payments were made in Ireland in the first half of 2025, up nearly 20% on the same period in 2024..

Digital wallets securely store your credit card or debit card details and billing addresses in protected software. This financial information is encrypted, which means it’s coded to help prevent hackers from accessing it. And when it comes to paying, your card number is never revealed to the merchant because it’s replaced with a unique code in a process called tokenisation.

When you use a digital wallet in a shop, you can sign in and quickly make purchases with just a click or tap. This typically requires authentication, so you might need to provide a PIN, fingerprint, or facial recognition. Electronic wallets might use NFC (near field communication), which allows your device to communicate wirelessly with payment terminals when they’re placed close to each other.

When you shop online or in apps, the same wallet passes on your payment information digitally so you don’t have to type in your card details each time.

Digital wallets come in three main types in Ireland: closed, semi-closed, and open. Each type offers different levels of flexibility depending on where and how you want to pay.

1. Closed digital wallets: Closed wallets are issued by specific companies and can only be used for purchases with that company or at affiliated locations. Amazon Pay is an example of a closed digital wallet that you can only use within Amazon stores. It means that shoppers can pay directly using systems enabled by open banking, and aren’t redirected to a third party payment service.

2. Semi-closed digital wallets: These wallets let you make payments at multiple retailers within a defined network. They aren’t tied to a single company but are accepted by a group of businesses partnered with the wallet provider. They tend to be less commonly used in Ireland than open wallets like Apple Wallet or Google Wallet.

3. Open digital wallets: Open wallets tend to be the most versatile type. They can be used for transactions with any retailer that accepts digital payments and work for both in-store contactless payments and online shopping. If you use Apple Pay or Google Pay within the wallet, for example, payments are usually funded through the linked debit or credit card. Some mobile wallets, like PayPal, let you connect a bank account so that the money is pulled straight from your bank balance.

You can’t usually use an e-wallet to store official identity documents, but this is set to change. Ireland is taking part in the EU’s Digital Identity Wallet initiative, which will let people keep digital versions of important documents like their birth certificate or driving licence on their smartphones, and share them as verified ID. The Government Digital Wallet is due to become available to citizens and residents by the end of 2026.

The following steps refer to using open wallets like Google Wallet or Apple Wallet, but the exact process can vary depending on your device. Not all devices support contactless payments, so it’s worth checking whether you have NFC on yours (if you want to use tap to pay).

1. Download the digital wallet app on your smartphone or smartwatch. You might find a wallet app is already installed. If not, you can download it from the app store.

2. Add your payment card. You can either enter the card details manually or use your phone’s camera to scan your bank card.

3. Verify your card with your bank. You may need to enter a one-time code sent by SMS or approve the card setup in your mobile banking app.

4. Enable security features. Switching on fingerprint or facial recognition not only makes it more convenient to use the wallet to pay, it also adds extra protection if your device is lost or stolen.

This depends on the type of digital wallet you use. PayPal is one example that requires you to have a bank account. With other options like Google Wallet, you’re not directly linking an account within the app, but you’re still using a debit or credit card to fund any contactless payments, and these are generally connected to a bank account.Similarly, closed digital wallets allow you to link debit or credit cards, but they aren’t intended as a place to store money. The idea is simply to make it quicker and easier to pay with the given retailer. Semi-closed digital wallets may or may not need a linked bank account – it depends on the provider. Many let you top up with a bank card or bank transfer.

So, while it is possible to use some types of digital wallets without having a bank account set up in the app, it depends on the wallet’s features and how you plan to use it.

It’s common to question how safe electronic wallets are compared to debit or credit cards.Digital wallets rely heavily on encryption, which means your sensitive information is scrambled and therefore hidden from cashiers and anyone around you. And when you make a contactless payment, your real card number isn’t shared with the retailer. Instead, a token is used for each transaction, which can help to protect your data if a shop’s systems are hacked. Plus, each time you pay, you authenticate the payment by providing your fingerprint, face scan, or PIN. This is a requirement under the EU’s PSD2 rules.

However, like any digital technology, hackers can sometimes try to access accounts, compromising your personal and financial data. Users can help protect themselves by:

• using a strong, unique password when setting up your e-wallet

• enable biometric authentication (if supported on your device)

• keep your device locked or switched off when not in use

• monitor your transactions on a regular basis to check for suspicious activity

• setting up or allowing a feature enabling you to lock or wipe your device if it’s lost

Read our handy guides to find out more about staying safe online.

Your smartphone’s operating system often determines your options. For example, Apple Pay is only available on iPhones, iPads and Apple Watches. Similarly, the Google Wallet and Samsung Pay are designed for Android users. It’s important to note that older phone models may not have the NFC technology needed for making contactless payments.

Lastly, it can help to verify the compatibility of your bank card with your preferred digital wallet. Not all personal debit, credit, or commercial cards may integrate seamlessly with every wallet. It’s often worth checking your bank’s website or customer service to check whether they would work.