Digital Wallets in India Explained

World of commerce has a humble beginning. It all started with the barter system, moved to gold and copper coins, then came paper money and the whole banking system. As technology progressed paper money gave way to credit/debit cards and now they are being replaced with digital wallets. One such country where this is visible as daylight is India, where digital wallets are on the rise.

But what exactly is a Digital Wallet?

Unlike a physical wallet which holds your money and cards, which you can touch, a digital wallet is totally digital. It accesses your banking and card information to make payments over the internet. You can either store money in the wallet or use it as a go between your bank and vendor to make a payment. Everything is done online, making it fast and secure and highly convenient. You can download a digital wallet app on your smartphone via app-store.

How does it function?

Once you have downloaded the app on your smartphone, you link it to your bank by adding in the account info or your credit/debit card information.

All that is left next is to make a purchase, which can be done by:

  • Using digital wallet information on any checkout screen, when shopping online.
  • If making payment in person then using the Near-Field Communication (NFC) chip on your phone and simply tapping your phone on the vendor’s payment terminal, just like you do with a card.

How secure are digital wallets?

When taking into account security concerns about digital wallets, there are none, except for your phone getting stolen or losing it. As for your digital wallet getting hacked, you don’t have to worry about it, as there are multiple layers of security features, like biometrics and two-factor authentication.

Even in case your digital is stolen or lost, anyone using your phone needs to have the password and your biometric information which they can’t have unless you are physically present with them. Moreover, you can remotely wipe any data on your phone.

Famous Wallet apps in India


Launched in 2010 Paytm dominates the Indian commerce market and has the largest customer base in the country. For quick transactions consumers can store money directly in the wallet. It works on a semi-closed model and is both secure and fast. Not only can you send and receive money but also pay your bills etc. No matter where you go in India, your Paytm will be accepted everywhere.

Spay India

Launched in 2018, in only a short span of time, Spay India has garnered a massive customer base. The secret to its success is its extremely easy to use interface and its selection of clientele. It has focused on those groups of Indian society, who have a need for digital wallets, but are not so tech savvy. Its simple interface allows users to make transactions, pay bills, buy plane or train tickets, and even pay insurance premiums with a few taps via Spayindia

Google Pay

It used to go by Tez when it was first introduced. When it comes to security and cashback services, it has no parallel in India. It does not store money on the wallet, rather it links up with your bank account and makes payments directly through it. Which means your money is always secure in your bank account. Best of all as Google Pay is international, you can use it anywhere in the world, where it offers its services.


A subsidiary of Flipkart, it was launched in 2015. PhonePe has one of the largest customer bases in India and offers its users a fast and secure mode of transaction. Whether making money transfers or recharging balance on your phone, all can be done by using PhonePe app.

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