Table of Contents

The world is getting increasingly digitized, with virtually every aspect of our lives existing in a digital form. Digital wallets are steadily replacing conventional ways of handling money, attracting broad audiences due to their unprecedented convenience.

Consequently, there's little surprise that building a digital wallet has emerged as a lucrative business idea. How to set up a digital wallet? What benefits does it provide to businesses? How to make a digital wallet without building it from scratch? Find the answers in this post.

What Is a Digital Wallet?

A digital wallet, or an e-wallet, is an application that enables electronic transactions, such as purchasing items online or in a brick-and-mortar store. Some e-wallets allow users to deposit money, while others work by linking to users' bank accounts. In addition, users can store their driver's license, loyalty card(s), and other ID documents in the wallet.

Why Do You Need To Invest in Mobile Wallet App Development?

Before we move to explaining how to create a mobile wallet app, let's look at some numbers proving that building a digital wallet is a worthwhile investment.

Market size

The digital wallet market was estimated at $318.5 billion in 2022 and is expected to demonstrate a CAGR of 18.5% in the next nine years. Such dramatic growth can be explained by the extensive adoption of smartphones and growing internet penetration rates. 

In 2022, 73% of people globally, including children over 10 years old, owned a mobile phone, and this trend isn't likely to decline. The increasing number of people using smartphones combined with the convenience and speed of digital transactions inevitably translates to the growing adoption of e-wallets. 

Digital wallets stats

Here are some more insightful stats supporting the idea of setting up a digital wallet:

In 2022, 32% of POS transactions and 49% of online purchases globally were completed using digital wallets.

47% of recent Forbes survey respondents said they spend more money using e-wallets than conventional payment methods.

The total value of digital wallet transactions reached $7.5 trillion globally in 2022.

Gen Z representatives aged 18-26 choose e-wallets as their main payment method for shopping (91%) and traveling (86%), with a staggering 78% of Gen Zers refusing to shop at merchants that don't accept digital wallets.

Benefits of Building a Digital Wallet App for Business

Digital wallets are getting enormous traction, and the e-wallet market is expected to grow. Let's look at how you can benefit from building a digital wallet.

Generate diverse revenue streams

With your own digital wallet, you have the flexibility to explore various monetization models. You can leverage transaction fees, partnerships, or value-added services to create new revenue streams and diversify your income sources. Also, you can offer your e-wallet as a white-label product, letting other businesses leverage your technology under their brand.

Leverage data ownership and insights

Having your own e-wallet puts you in control of customer data. This ownership allows you to make the most of valuable insights into consumer behavior, preferences, and purchasing patterns for more data-driven decision-making.

Create a customized brand experience

Building an e-wallet allows you to create a seamless and branded experience for your customers. From the user interface to the overall design, you can align the digital wallet with your brand identity, fostering brand loyalty and recognition.

Break into the global market

Digital wallets provide infrastructure for cross-border transactions and currency conversions, allowing businesses to tap into new markets and reach an international customer base.

Foster customer loyalty

Retailers or service providers can build closed digital wallets that operate only within their business. Closed wallets allow companies to offer exclusive discounts, rewards, and promotions, fostering a sense of loyalty among customers. 

How To Create a Digital Wallet: A Step-by-Step Process

The growing popularity of e-wallets translates to intense market competition. Therefore, launching a digital wallet calls for a well-thought-out approach to ensure its success. Here are the major steps to take, from deciding on your wallet type to testing the final product.

Decide on the type of digital wallet

There are three types of e-wallets: closed, semi-closed, and open. Closed wallets are exclusive to a specific business or industry, and semi-closed wallets can operate within a restricted ecosystem of merchants and providers. In contrast, open wallets are universal digital payment systems. Carefully consider your target audience, business objectives, and industry dynamics when making this critical decision.

Define the functions and features

Next, identify the core functionalities of your future e-wallet, including payment processing, security features, and user authentication. Also, consider incorporating features that enhance user experience, such as loyalty programs, built-in budgeting tools, integration with other applications, and real-time notifications.

Choose the best technologies

Today, a variety of programming languages, frameworks, and databases are used in application development. It's critical to choose the technologies that can best meet your project requirements and ensure the adequate level of efficiency, security, and scalability of your digital wallet application.

Make a prototype

Before building a full-fledged application, consider creating a prototype. The prototype will let you visualize the user interface, test functionality, gather early feedback, and identify issues. Such an approach ensures that the final product aligns with user expectations and market demands.

Develop and test your digital wallet

Once the prototype has been refined, you can proceed with the development phase. Security is more than critical in the financial services sector, so test your digital wallet across various scenarios to identify and address vulnerabilities. Also, perform usability testing to ensure an intuitive and user-friendly interface.

How To Build a Digital Wallet on Top of Finamp Payment Software?

While building a digital wallet from scratch can take months, we offer a brilliant solution to help you create your own digital wallet quickly without compromising quality and security. Finamp Core provides a robust foundation for creating a digital wallet tailored to your unique needs. 

What is Finamp Core?

Finamp Core is a white-label product that can serve as the backbone of your digital wallet. It's already equipped with essential modules such as user management, transaction processing, security measures, and support for multiple payment methods.

How to create a digital wallet app with Finamp Core?

Step 1. Define your vision

Start by conceptualizing the purpose of your digital wallet and determine the core functionalities you want to offer. Do you wish to cater to individual consumers or businesses? Will your wallet support international currencies, cryptocurrencies, or both? Your vision will guide the customization process.

Step 2. Customize according to your needs

Next, add features that align with your vision, for example, biometric security or loyalty programs. Also, incorporate UI/UX design elements that will resonate with your branding and target audience, ensuring the wallet is not only functional but also intuitive and engaging.

Step 3. Integrate additional services

Depending on the purpose of your e-wallet, you can integrate additional services such as P2P transfers, bill payments, or financial tracking tools. These services can offer added value to your users, making your digital wallet more than just a transaction tool.

Step 4. Take care of security

Utilize Finamp Core's security protocols and enhance them if necessary. Incorporate end-to-end encryption, two-factor authentication, and continuous monitoring to safeguard user data and maintain trust.

Step 5. Ensure compliance and test your e-wallet

Financial services belong to the most heavily regulated sectors, so make sure your wallet follows the necessary regulations. Also, rigorously test the wallet in various scenarios to iron out any kinks and ensure a smooth, secure service.

Step 6. Launch and iterate

After thorough testing, launch your digital wallet, implementing a marketing strategy to promote it. But the work doesn't stop there. It's crucial to collect feedback and analyze user behavior to continuously iterate and improve the wallet.

How to Set Up a Secure Digital Wallet

Security is one of the top priorities in fintech development, building digital wallets being no exception. So how to build a digital wallet that is ultimately secure and ensures strong protection of sensitive information? Let's look at the best practices for coping with this challenging task.

Implement multi-factor authentication

Multi-factor authentication means using two or more forms of authentication to access an e-wallet account, usually a combination of a password and a biometric identifier, such as a fingerprint, face, iris, or voice recognition, or a one-time code. This helps to effectively enhance protection against unauthorized access.

Use end-to-end encryption

End-to-end encryption means that data is encrypted, i.e., converted into unreadable code on the user's device, and can only be decrypted by the intended recipient. End-to-end encryption helps ensure that the data exchanged between the user's device and the digital wallet can't be intercepted by malicious entities.

Store sensitive information securely

Employ robust security measures for storing sensitive data, including advanced encryption algorithms and secure key management systems. This protects user information from unauthorized access even if a breach occurs.

Employ strong password protection

Prompt users to set strong, unique passwords and implement password protection features, such as account lockouts after multiple failed login attempts.

Apply point-to-point encryption

Secure payment transactions by leveraging point-to-point encryption. This ensures that sensitive financial data is encrypted from the point of entry (e.g., a swipe against a POS terminal) to its destination.

Leverage tokenization

Replace sensitive data with tokens — combinations of symbols that don't contain any financial data and can't be deciphered — during transactions, minimizing the exposure of valuable information.

Consider adding an account-blocking feature

Enable account blocking mechanisms to swiftly respond to suspicious activities to prevent unauthorized transactions and protect users from potential fraud.

Perform regular security audits

Continuously monitor your wallet's security infrastructure by conducting regular audits. This helps to identify and address vulnerabilities early, ensuring that your wallet remains resilient against emerging threats.

Get a firewall

Deploy a robust firewall to monitor and control incoming and outgoing network traffic. This serves as a barrier against unauthorized access and potential cyber threats.

Enable transaction limits

Allow your users to establish transaction limits. This will help them avoid transferring too much money or too frequently and minimize damage in case of a breach.

3 Main Challenges of Developing a Digital Wallet

While launching a digital wallet is a promising idea, this business is also associated with some challenges.


Setting up a digital wallet is more complicated than most other types of apps due to complex regulations governing financial operations and data protection. Moreover, these regulations vary across different regions. Given that, it's not enough to know how to set up a digital wallet — you should understand diverse regulatory frameworks and make sure your product follows them.

Risk of fraud

Financial transactions have been a target of fraud long before the advent of the internet, and things haven't changed with the development of digital technologies. It's crucial to adopt strong security measures to protect your users' sensitive data and assets against fraud and regularly audit the wallet for security vulnerabilities.

Technological complexity

Building a digital wallet app calls for professional expertise and a profound understanding of the latest technologies. It's vital to hire an experienced team of developers who know how to create digital wallet applications that are secure, fast, and easy to use. 


Building a digital wallet is a viable way to open new revenue streams and establish your business as a global brand. If you are considering developing an e-wallet but are discouraged by the long months the development process takes, the team at Finamp has you covered.

We've done most of the work for you — we've built the secure and high-performing Finamp Core, a robust backbone of your future e-wallet. Finamp Core is fully customizable, meaning that on top of it, you can create a bespoke fintech solution to meet your business requirements and user expectations.

Frequently Asked Questions

How long does it take to develop a wallet app?

The timeline of developing a digital wallet can vary based on its features, functionality, and platform compatibility. Simple apps may take a few months, while more complex ones may require six months or longer. However, you can have the best of both worlds — build a functional, feature-rich product with reduced time-to-market — with Finamp Core, a robust white-label e-wallet you can customize according to your needs.

Can you provide an example of the innovative use of a digital wallet?

Digital wallets can be used for contactless payments for public transportation. Cities worldwide are adopting digital wallets, which allow commuters to pay for their rides seamlessly by tapping their smartphones.

How much does it cost to create a digital wallet?

The cost of creating a digital wallet depends on various factors, including features, platform compatibility, and security measures. While basic e-wallet apps can start at around $20,000, building more complex applications can cost several hundred thousand dollars.

What technology is used for mobile wallets?

Mobile wallets leverage several technologies for secure and efficient transactions. The most common technologies include Near Field Communication (NFC) for contactless payments and QR codes for scanning. 

What technology should we pick for implementing mobile payments?

Selecting the right technology for mobile payments depends on various factors, such as user experience, security, and infrastructure. NFC technology is widely used for contactless payments, while QR codes offer a more cost-effective alternative. The choice should align with your specific goals and the preferences of your target audience.

How to make money with digital wallets?

Digital wallets can generate revenue through various channels, including transaction fees, subscription models for premium features, and partnerships with businesses for promotional tie-ins.