What are digital wallets and how to accept digital wallet payments

Written by Admin | Mar 21, 2025 12:00:00 AM

Digital wallets powered nearly half of global e-commerce transactions in 2022, and that number is expected to hit 54% by 2026 (Statista). The shift spans retail, travel, food services, and digital storefronts. Businesses that accommodate this change aren't just keeping up—they're removing unnecessary hurdles for their customers.

Asia leads the movement. Indonesia alone is expected to welcome 130 million new e-wallet users by 2025 (ASLIRI), making it Southeast Asia's largest wallet market. Similar momentum is building in Latin America and the Middle East. If you're expanding in these regions, supporting trusted local wallets isn't optional—it's foundational.

How digital wallets work

Digital wallets store payment details securely on a smartphone or app. These might include cards, bank accounts, or even crypto, depending on the wallet.

Here's a breakdown of how they typically work:

Setup: The customer installs a wallet (such as Apple Pay, Google Pay, Alipay, or GCash) and links a payment source.
Security: The wallet converts sensitive payment data into a unique token, reducing the risk of exposure.
Checkout: During payment, the customer picks the wallet option, using a device like a phone or smartwatch.
Processing: The token travels to the payment processor, is authenticated by the bank, and is approved.

It's often quicker than entering card details, and with tokenisation and biometric checks, it's built to limit fraud.

Why businesses are prioritising wallet payments

Customer ease: Tap-to-pay or scan-and-go makes checkout quick. Fewer steps mean fewer drop-offs.
Regional loyalty: Local wallets often outpace international cards in user trust. In Southeast Asia, GrabPay, GoPay, and ShopeePay are everyday tools.
Security coverage: Wallets lower PCI compliance scope by keeping sensitive data off your servers.
Consistent touchpoints: Wallets support smooth transitions between web, mobile, and in-store purchases.
Borderless potential: Accepting local wallets enables more cross-border sales with less friction.

Which wallets matter where?

Region	Popular Wallets
Mainland China	Alipay, WeChat Pay
Southeast Asia	GrabPay, GCash, Dana, OVO, ShopeePay
Korea	Kakao Pay, Toss Pay
Japan	PayPay
Latin America	Mercado Pago, PicPay

Choosing which wallets to support hinges on your market. Preferences vary widely, and the right fit depends on where your customers are.

In China, Alipay and WeChat Pay are embedded into everyday life—from buying groceries to paying utility bills.

In Southeast Asia, many skipped traditional banking altogether and adopted mobile wallets. Apps like GCash and ShopeePay go beyond payments—they cover loyalty, transfers, transport, and food delivery.

South Korean consumers rely on Kakao Pay and Toss Pay, which tie into messaging, shopping, and banking.

PayPay's rapid rise in Japan stems from aggressive promotions and widespread acceptance across channels.

In Latin America, Mercado Pago is tightly integrated into the region's largest online marketplaces and supports users across banking statuses.

These habits aren't fixed. But watching where your customers live and how they prefer to pay helps remove checkout barriers. The aim isn't every wallet—just the ones that matter where you operate.

Use cases across industries

E-commerce: Wallet support accelerates checkout and unlocks local payment methods.
Retail: NFC and QR tech enable low-touch, in-store wallet payments.
Food & beverage: QR code payments at tables remove the need for cards or cash.
Travel and hospitality: Wallets ease international purchases—whether booking a flight or buying in-flight extras.

How to start accepting wallet payments

Choose a payment provider that supports the right wallets. This is especially crucial if you serve multiple regions.
Update your POS for QR and NFC compatibility. In mobile-first regions, QR is the standard.
Let customers know what's available. Signage, app nudges, and checkout messages can guide them.
Keep transactions secure and compliant. Wallets can simplify PCI compliance, but local tax and data rules still apply.

What's different for small vs. large businesses?

SMEs: Look for simple, all-in-one solutions that come with wallet support. You get started fast without extra staffing.
Enterprises: Large businesses often need regional acquirers, currency support, and advanced compliance handling.

Wallets and risk management

Supporting digital wallets helps manage the risk of storing sensitive data, minimises fraud exposure through tokenisation and biometric verification, and helps meet local regulations around payments, data residency, and consumer protection.

For example, supporting wallets in India or Indonesia may help you avoid specific licensing or tax remittance issues that card-only setups struggle with (ASLIRI).

Digital wallets aren't just another payment option—they're becoming the first choice for consumers in many regions. For businesses with cross-border ambitions, or simply aiming to reduce cart abandonment and increase trust, supporting wallets is no longer optional. It's an investment in conversion, security, and customer satisfaction.

Want help figuring out which wallets matter most to your customers? Reach out to a payment expert to talk through your market priorities.

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