How to Create Digital Wallet: All-in-one Guide for Founders

Do we even have to talk about the stress level when you start a fintech startup and need to build a product that fits the market, satisfies users' needs, and wins among other fintech products? Not really. However, we need to determine the approach to help you achieve everything mentioned above. And remain sane.

In today's article, we'll talk specifically about digital wallets, also known as e-wallets. I'll explain how to create a digital wallet in steps. More importantly, I'll give you handy tips on securing your digital wallet and overcoming the most common development challanges. 

We are working with clients from the fintech domain since 2016. Such fintech products as Aspiration and Cardless are in our portfolio, so I must ensure you that this article is based on real-life cases and experience. 

build digital wallet with experts

Digital Wallets Stats: What do we have now and what to expect in 10 years?

What is digital wallet?

Let's make sure that we're on the same page and recall the fundamentals. Digital wallets, also known as e-wallets – are mobile applications that allow users to store digital versions of their credit cards, debit cards, and other payment methods, enabling them to make purchases quickly and easily online or in stores.

Digital Wallets Stats

According to a report by Grand View Research, the global digital wallet market size was valued at $1.04 trillion in 2020 and is expected to grow at a compound annual growth rate (CAGR) of 20.8% from 2023 to 2030. The report says we should thank the increasing adoption of smartphones and the need for contactless payment options, particularly in light of the COVID-19 pandemic – for such rapid growth. 

digital wallet market

So what to expect from digital wallets in the upcoming 10 years? The digital wallet market will continue to grow at a rapid pace. The increasing use of mobile devices for financial transactions and the emergence of new technologies such as blockchain, biometrics, and AI is expected to push the adoption of digital wallets further and make them even more appealing to consumers.

Why To Create a Digital Wallet: Benefits For Your Business

Setting up a digital wallet really looks like a prospective niche, but before developing one, you should answer the question, "why?" Below I gathered several benefits a founder gets by creating a digital wallet.

why to create a digital wallet

It increases customer engagement and loyalty

Digital wallets make it easy for users to make payments and transactions from anywhere, at any time. This can increase customer engagement and loyalty, as well as help businesses reach new customers who prefer to make payments digitally.

It saves costs

Digital wallets can reduce transaction costs for businesses, as they eliminate the need for physical cash or traditional payment methods. Additionally, digital wallets can streamline accounting and financial reporting processes, reducing administrative costs.

It provides data insights

Digital wallets provide businesses with valuable data. And data nowadays is everything! You get insights into customer spending habits, preferences, and behavior. This data can help improve your business's marketing strategies and better understand your customers.

It provides higher security

Digital wallets can offer enhanced security features, such as encryption and two-factor authentication, which can protect users' sensitive financial information from theft and fraud.

It attracts and retains customers

Digital wallets can be integrated with other services, such as loyalty programs, ecommerce platforms or rewards systems, which can help businesses attract and retain customers.

The "HOW TO" Part. Here're 6 Steps on How to Make a Digital Wallet

So, we have approached the most interesting part of this article. Let me guide you through the process of digital wallet project creation. 

Below I described the steps and approaches we use at Uptech to develop products. If you have any questions regarding them or need a consultation about your digital wallet project, feel free to reach our team. We'll be happy to help you. 

how to build a digital wallet

Step 1: Define Your Goals and Features

The first step in creating a digital wallet is to define your goals and features. 

  • What is the purpose of your digital wallet?
  • Who is the target audience?
  • What features will it have? 

For example, will your digital wallet allow users to store multiple currencies, make payments to merchants, and transfer money to other users?

It's important to clearly understand your goals and features before moving on to the next step. This will help you determine the technologies and resources needed to build your digital wallet.

Uptech tip: Product Discovery is the stage of product development that comes in handy here. We at Uptech conduct product discovery to validate your idea, define a feature set, and find product-market fit. 

Step 2: Choose a Platform and Technology

The next step is to choose a platform and technology for your digital wallet. There are several options available, including iOS, Android, and web-based solutions. You'll also need to choose a programming language, such as Java, Python, or Swift.

When selecting your platform and technology, it's important to consider your target audience and the devices they use. For example, if your target audience primarily uses iOS devices, it makes sense to develop your digital wallet as an iOS app. 

If you didn't take the product discovery stage seriously, this is a good example of how skipping it can lead to a product with no market fit and huge cost losses. 

Uptech tip: At Uptech, we offer tech stack audits where we engage our Solution Architect, who analysis your business' needs and pick the best tools. We make sure to build a scalable and secure app. 

Step 3: Create a User Interface

Once you've selected your platform and technology, it's time to create a user interface (UI) for your digital wallet. The UI is the front-end of your digital wallet and is what users will interact with.

Consider that 52% of users think a poor mobile experience causes them to lose trust in an app. This is why it's so important to hire a professional UX/UI designer

Your UI should be intuitive and easy to use. It should allow users to quickly access their account information, make payments, and transfer funds. Consider using a minimalist design with clear, easy-to-understand icons and buttons. 

Check out the examples of UI concepts for fintech apps we create:

digital wallet design
digital wallet design

Step 4: Integrate Payment Gateways

The next step is to integrate payment gateways into your digital wallet. Payment gateways allow users to make payments using their credit card, debit card, or bank account.

There are several payment gateways available, including: 

  • PayPal;
  • Stripe;
  • Braintree.

It's important to choose a payment gateway that is secure and reliable, as users will be entrusting their financial information to your digital wallet.

Here's our article in which we explain how to create a website with payment gateways

Step 5: Implement Security Measures

Security is a top priority when it comes to fintech apps, and digital wallets aren't an exception. You'll need to implement several security measures to protect user data and prevent fraud.

  • Implement two-factor authentication, which requires users to enter a second form of authentication, such as a code sent to their phone, before accessing their account. 
  • Use biometric authentication, such as fingerprint or facial recognition.

Interesting fact, Face ID on Android doesn’t provide full security and is easy to hack. So if you want to create a digital wallet on Android, my recommendation is to use fingerprint instead. 

There are more ways to secure your fintech apps. We have described 7 the most common in our fintech security guide. Check it out!

build secure digital wallet

Step 6: Test and Launch Your Digital Wallet

Before launching your digital wallet, it's important to thoroughly test it to ensure that it's functioning properly and is user-friendly. This includes testing for security vulnerabilities, as well as testing for usability and performance.

Once you've completed testing, you're ready to launch your digital wallet! Every founder knows that this is where the hard work begins. In the first weeks, you should cope with all the bugs and crashes if they happen. When things calm down, you maintain your app, gather feedback, improve it constantly, and release the next app versions. 

Uptech tip: Launching a startup is hard. Bet if you did a quality job during the development, conducted in-depth discovery, created a stable app infrastructure, and tested the app – there will be less headache after launch. 

You can trust the development part to our professional developers as we have been developing fintech apps since 2016 year and know all the ins and outs of this industry. Check out our fintech software development services.

How to Set Up a Secure Digital Wallet

how to create a secure difital wallet

I can't stress enough the importance of security in fintech app development, and as we at Uptech prioritize security, here are 10 practical development tips to make a digital wallet secure:

Implement multi-factor authentication

MFA requires the user to provide two or more forms of authentication, such as a password and a biometric identifier, like a fingerprint, to access their account.

Use end-to-end encryption

End-to-end encryption ensures that the data transmitted between the user and the wallet is secure and cannot be intercepted by a third party.

Store sensitive information securely

Sensitive information like user credentials and private keys should be encrypted and stored in secure servers.

Use password protection

Provide several codes that users should enter at various stages of working with a digital wallet.  

Use point-to-point encryption (P2PE)

It ensures end-to-end protection and encrypts the whole transaction when an owner swipes the phone over a PoS terminal.  

Implement tokenization

A token is a combination of symbols that don't contain financial info and are useless for fraudsters. It allows the app to secure e-wallet payments using data encryption and stores users' data on cloud. 

Use account blocking

The system can black the wallet when there's suspicious behavior with the user's wallet. Or on the owner can block the wallet by call, message, or in another way. 

Conduct regular security audits

Regular security audits can help identify potential vulnerabilities and allow developers to address them before they become a problem.

Use a firewall

Firewalls can help prevent unauthorized access to the wallet, protect against malware and viruses, and block suspicious network traffic.

Implement transaction limits

Set transaction limits to prevent users from transferring too much money at once or too frequently. It will help limit the damage caused by a security breach.

how to create a digital wallet

3 Main Challeneges of Developing a Digital Wallet

Different compliance regulations

Money and finance are strictly regulated by the central bank. Nowadays, most digital payment apps must comply with AML, GLBA, and JOBS Act. in the US, and GDPR and PSD2 SCA in Europe. 

The tricky thing is that the legal regulations vary from country to country, sometimes even from state to state. It's important to get familiar with the current norms and regulations in your target country and choose a fintech app development partner with previous experience in the fintech domain.

Fraud detection & Risks mitigation

Fraud is a big problem in digital wallet app development, and it's important to take steps to prevent it. Many people who are not familiar with eWallets are easily fooled, and digital wallet payment risk is associated with data theft, data leak, malware attack, hacking, and more. This risk is one of the main reasons why some people avoid using eWallets or abandon them. However, with advanced technologies and security hacks, developers can now mitigate the most common app vulnerabilities and risks

Technological hurdles

Let's keep it clear: setting up a digital wallet app is a complex task and requires much expertise. To ensure that your project is successful, it's important to hire an experienced app development company that has experience in creating secure, fast, easy-to-use, and scalable apps. Companies like Uptech can guide you in creating an effective app that meets your business' and users' needs. 


Developing a digital wallet may seem overwhelming. Security challenges, domain complexities, and tech issues – all these require expertise and a team of professionals. So don't be afraid to ask for help and assistance where needed. 

Leveraging Uptech expertise and 7 years of experience in app development can really help. It is a smart move to take some time to find a reliable development partner. It can save you time and money to trust the part of digital wallet development to an outsourcing team with a lot of experience. So we will be here when you need some guidelines with developing your product. If you're looking for extra hands now, contact our team.


Let’s build your next product! Share your idea or request a free consultation from us.

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