How to Create a Digital Wallet App And Make It Highly Secure

How to create a wallet app? Developing a digital wallet is a strategic, long-term investment and an excellent entry point into the FinTech niche. As demand for quality digital financial services grows, a well-designed wallet app positions your business to offer innovative, convenient solutions while establishing a strong foothold in the FinTech market.

Cleveroad, as an experienced FinTech app development company, will help you identify the reasoning behind building a digital wallet, define how you can benefit from it, go through essential functionality and digital wallet app security considerations, and more. So, let’s get straight to the point!

Let’s start with the basics. A digital wallet application is a mobile or web-based app that securely stores sensitive payment information, allowing users to make transactions, manage funds, and store digital assets like loyalty cards or tickets. This solution significantly simplifies casual payments by enabling quick, cashless, and often contactless transactions.

The types of e-wallets are different according to the models of payment processing. We will provide you with a few examples:

• Wallets that use mobile communication providers. The user sends and receives remittances with the help of a mobile operator.
• Wallets that write off funds using SMS messages. Wallets that deduct funds via SMS use text messages to authorize and process payments, enabling transactions without Internet access.
• Wallets that make mobile web payments. User sends and receives payments using the app.
• Wallets that use near-field communication (NFC). This works due to the mobile app and special equipment (NFC chip) in the smartphone for contactless interaction with the terminal.

E-banking is definitely taking over the world, and here’s the most vibrant stats proving it:

• According to Statista, the global digital payments market is projected to hit $10 trillion by 2026
• In the U.S., 65% of citizens have used a digital wallet at least once in the past month
• China and India lead in mobile wallet adoption, with platforms like Alipay and WeChat Pay transforming payments. In China alone, Alipay serves over 1.43 billion users
• Juniper Research states that global digital wallet users are forecasted to grow from 4 billion in 2022 to 5.2 billion by 2026, a 53% increase​

As you can see, now is a prime time to accomplish mobile wallet application development. Let’s proceed to the key benefits you’ll achieve from creating a digital wallet solution.

Mobile wallet app development not only offers users a smooth and efficient digital finance option but also unlocks substantial short-term and long-term benefits for your business. Here are several ways you may benefit from the creation of a digital banking solution:

By eliminating the need for physical wallets or cards, it makes everyday payments and fund transfers much smoother for your target users. They can also store loyalty cards, tickets, and other essentials within a unified digital environment. With the growing adoption of NFC and QR-code payments, businesses can appeal to a tech-savvy audience, making transactions faster and more accessible.

Digital wallet app development opens up multiple revenue streams for businesses. From transaction fees and in-app ads to partnerships with merchants, these apps can generate significant income. By integrating advanced features like budgeting tools or cryptocurrency support, businesses can attract a wider audience, boosting customer retention and lifetime value.

Digital wallets are capable of capturing valuable data on user preferences, spending habits, and transaction behaviors. You, as a business, can use these insights to offer tailored promotions, optimize services, and enhance user experiences with your wallet app. This data-driven approach deepens customer engagement and supports smarter strategic planning.

Virtual wallet app development places your business at the forefront of the expanding FinTech industry. This move helps establish your business as an innovator in a high-demand space. Besides, integrating with banks, e-commerce platforms, and other financial services expands your reach, opening doors to partnerships and growth opportunities.

If you decide to find out how to develop e-wallet app, you will have to consider all the basic features the new app must contain to satisfy clients' demands. Let’s identify key functionality modules and overview each component in more detail:

The user account management module within mobile wallet application development is essential for creating and managing user profiles, ensuring secure access, and offering features that personalize the app experience while maintaining data security. This functionality module usually includes:

• Registration and login: Secure sign-up and login methods like email or social accounts
• Profile customization: Options to personalize user profiles with details and images
• Security settings: Advanced safety features like PIN codes and biometric authentication
• Multi-device sync: Seamless wallet access across multiple devices

The Transaction Features module is designed to handle all payment-related interactions, enabling seamless, efficient, and secure financial transactions for users. Transaction features are:

• Peer-to-Peer (P2P) transfers: Direct money transfers between users
• Contactless payments: Transactions using NFC or QR codes for ease
• Bill payments: Paying utilities and services directly via the app
• Transaction history: Tracking and reviewing past payments

The wallet funding and withdrawals module facilitates adding funds to the wallet and accessing them when needed, offering flexibility and control over user finances. This mobile wallet app development functionality module consists of the following features:

• Bank account linking: Connecting accounts for seamless transactions
• Credit/debit card integration: Adding cards for wallet funding
• Cash-in at partner locations: Depositing funds via partnered outlets
• Withdrawals to bank accounts: Transferring wallet funds back to banks

To enhance the app’s overall functionality, there are a wide range of services you may want to include within your digital wallet. This will provide users with extra tools and features to manage their financial and digital assets more effectively. Here are the most distinct ones:

• Loyalty card storage: Conveniently saving and managing loyalty cards
• Budgeting and expense tracking: Monitoring expenses with smart tools
• Gift card management: Organizing and utilizing gift cards effectively
• Cryptocurrency wallet integration: Managing and transacting with crypto assets

Besides, you can also create a wallet application that will provide users with a more profound experience by implementing more complex functionality. Below, you can examine the list of advanced functionalities that may facilitate deeper user engagement and experience:

• Cross-border payments
• Dynamic currency conversion
• Advanced fraud detection and risk management
• Integration with decentralized finance (DeFi) platforms
• Voice-assisted transactions
• Investment and savings options
• Split bills and group payments
• Real-time payment notifications

So it is up to you to choose what type of mobile wallet you want to create, whether it’s an open wallet or one linked to a specific debit card. Before diving into development, research the wallet market thoroughly to identify opportunities and challenges.

Keep in mind that wallet providers already dominate the landscape, making it challenging to emerge as a leader. Your decision to build a mobile wallet must focus on offering substantial advantages over competitors, ensuring it stands out with innovative features and user benefits.

While attempting to create your own wallet application, it’s vital to cooperate with an IT partner with extensive experience in delivering solutions for the FinTech domain. By doing so, you’ll receive robust assistance throughout each wallet app development stage.

As an experienced FinTech software development services provider, Cleveroad team prepared a list of 6 steps for you to keep up with during digital wallet mobile application development:

The creation of a successful digital wallet app begins with thorough research into the digital wallet market. Analyze user needs, current digital finance trends, and competitor offerings to identify unique value propositions. To build a mobile wallet app, it’s crucial to precisely define the app's core functionalities and set clear business objectives aligned with market demand. Besides, digital wallets provide convenient solutions for users, enhancing transaction efficiency and accessibility. An experienced FinTech software development vendor can assist you in validating your concepts to create solutions with feasibility studies and by identifying tech requirements to achieve your goals effectively.

While considering how to make a wallet app, choosing the appropriate technology stack is critical for ensuring scalability, security, and performance of the completed solution. Whether leveraging cross-platform frameworks like Flutter or native development for iOS and Android, the technology must support the app’s goals. A FinTech software vendor’s expertise ensures the selection of reliable tools and frameworks, optimizing both development efficiency and app functionality.

Here’s the tech stack the Cleveroad team usually uses to create a wallet app:

At this stage, your IT partner will create a comprehensive roadmap outlining your wallet app’s features, ensuring a balance between essential functionalities like payment processing and advanced tools such as budgeting or cryptocurrency support. Following this, UI/UX designers will develop prototypes and design templates, focusing on intuitive navigation and visual appeal to enhance the overall user experience. This collaborative process ensures that the wallet app aligns with both functional requirements and user expectations.

After completing all preparations, your development team starts coding the app, beginning with the back-end infrastructure to ensure secure and efficient data management. The front-end development focuses on creating an engaging user experience. Comprehensive testing is essential to detect and resolve bugs before launch. Your development partner thoroughly manages iterative testing cycles to ensure the app functions flawlessly under various conditions.

Digital wallet apps deal with sensitive financial and personal user information, making regulatory compliance and robust security measures a must-have. A software development vendor with extensive experience within FinTech will help you ensure your wallet app complies with standards like PCI DSS, ePrivacy, GDPR, etc. and will employ encryption to protect user data.

At Cleveroad, we facilitate wallet app security through implementing 2FA (Two-Factor authentication), MFA (Multi-Factor Authentification), biometric data authentication, etc. Besides, we strictly align with essential FinTech security standards like GDPR, ePrivacy, PCI DSS, and more to deliver highly safeguarded, trustworthy and reliable digital finance solutions.

After the wallet app deployment, your development team will monitor the app’s performance using analytics tools (e.g., Mixpanel) to identify areas for improvement. The,n you’ll be able to gather user feedback and roll out relevant updates to enhance features or fix issues.

Note: The partnership with your development vendor doesn’t end at launch – they can assist with maintenance, scaling, and implementing new technologies to keep your wallet reliable, secure, and functional. Feel free to contact us to discuss your specific needs directly with our FinTech business development manager, to discuss the next steps for creating an innovative digital wallet.

Security is undoubtedly the most important component of digital wallet creation. Nobody wants to disclose their sensitive financial and personal data to an external party.

As a FinTech software development company upholding ISO/IEC 27001:2013 for security management, we at Cleveroad would like to provide you with valuable practices you’ll need to include during digital wallet app development to make your service a safe space for users.

This is an advanced and robust security tool that protects the whole transaction from the beginning to the end. It starts encrypting the transaction when you swipe your phone over the PoS terminal, and then funds are in transit and up to the authorization. This type of protection is included in the list of must-have security features your mobile wallet payment gateway should have.

Tokenization is a technology that makes e-payments secure with the help of a reliable data encryption system. The buyer doesn't give the seller his or her payment details, paying by card. All card information is encrypted, and it is turned into a token that looks like a random symbol combination.

Implementing transaction limits within mobile wallet development help mitigate risks by capping the amount or frequency of payments, safeguarding users from unauthorized or fraudulent activities. Limits can be dynamically adjusted based on user behavior or account verification levels, offering flexibility while maintaining security.

Of course, a password is the type of protection any app or website with personal protection should have. It is better to add a rejection feature if the customer creates too simple or too short a password. It will help you increase protection and make a wallet more secure.

Optionally, additional biometric protection support can be added. If the smartphone of the user is advanced enough and it has a fingerprint scanner, your mobile wallet app may require authorization using biometric data.

Account blocking immediately responds to suspicious activities, such as multiple failed login attempts or flagged transactions. Users or administrators can temporarily freeze accounts to prevent further unauthorized access. Together, these features protect user funds and sensitive data, enhancing trust and compliance with financial security standards.

Blockchain enhances wallet app security by creating a decentralized ledger that ensures transaction transparency and immutability. Each transaction is encrypted and recorded in blocks linked chronologically, making unauthorized alterations nearly impossible. Blockchain-based wallet apps also eliminate reliance on a central authority, reducing vulnerability to cyberattacks. Blockchain enables secure user authentication and data sharing through cryptographic methods.

The development of digital mobile banking solutions may go hand in hand with different technical and functional complexities. Let’s unpack each of them and will try to extract the potential solution:

Digital wallets must adhere to laws such as PCI DSS for payment data security, GDPR for user privacy in Europe, or AML and KYC standards to prevent illegal activities. Meeting these requirements demands legal expertise to ensure data protection protocols are in place. Mind that regulatory standards vary across regions, complicating development for businesses aiming for global markets. Unfortunately, failure to comply can result in severe penalties or loss of user trust.

Cleveroad expert tip: Pay strong attention to your software development vendor expertise and past experience in delivering FinTech solution, especially regarding their ability to align with legal requirements. Seek for IT partner that proficiently integrates secure data encryption, thorough KYC processes, and robust AML checks into the app, ensuring it meets global regulatory standards without compromising user experience.

Digital wallet mobile app development involves tackling numerous technological hurdles, such as ensuring scalability to handle a growing user count and optimizing performance for high-speed transactions. Implementing cutting-edge features like NFC payments or blockchain integration requires advanced technical expertise and careful planning. Compatibility across multiple devices and operating systems, especially in cross-platform apps, adds further complexity. Moreover, ensuring data security amidst growing cybersecurity threats remains a constant concern.

Cleveroad expert tip: We at Cleveroad overcome these challenges through a systematic, future-oriented approach. By leveraging advanced tools like Flutter and React Native, we deliver seamless compatibility across iOS and Android devices. Our team specializes in integrating technologies such as blockchain for secure transactions and NFC for modern payment solutions.

Preventing fraud within virtual wallet app development is a continuous challenge as cyber threats constantly evolve. Balancing stringent security protocols with user convenience can be difficult, as overly complex measures may deter users. However, maintaining up-to-date security measures and responding swiftly to potential threats is essential for protecting user funds.

Cleveroad expert tip: It’s quite reasonable for you to consider implementing AI-driven fraud detection systems and integration of multi-factor authentication with your vendor. Besides, user behavior analysis and dynamic risk scoring proactively mitigate risks while maintaining a seamless user experience. Ensure that your wallet app receives qualitative updates in order to keep it highly secure.

Integrating a wallet app with external systems such as payment gateways, banking APIs, and e-commerce platforms presents technical and logistical challenges. Ensuring seamless communication between systems requires compatibility with various protocols, compliance with security standards, and robust data synchronization mechanisms. Managing integration for global markets adds complexity, as different regions often use distinct banking and payment systems.

Cleveroad expert tip: Integration of a wallet app with external systems is achieved through a combination of API development, middleware solutions, and adherence to best practices in compatibility and scalability. Prioritizing secure and efficient data exchange ensures minimal latency and reliable communication between your app and payment gateways, banking APIs, or e-commerce platforms.

Cleveroad is a FinTech software development company with over 12 years of experience in digital finance solution creation. Leveraging our extensive expertise, we assist businesses in creating secure, reliable, and user-friendly solutions that maintain user trust and foster long-term engagement.

We provide a wide range of FinTech software development services, including custom FinTech software development, third-party integrations (e.g., Blockchain, ApplePay, NFC, PayPal, SEON, GPS, etc.), existing software reengineering, digitalization, and optimization.

Besides, our team design solutions that fully align with industry regulations including PCI DSS (SDP, CISP, AIS), GDPR, ePrivacy, KYC, SES, MiFID, and much more.

Here’s the brief list of FinTech solutions we deliver:

• Digital wallets
• Cryptocurrency wallets
• Cryptocurrency exchange
• AI-based robo-advisory
• DeFi apps
• Malware & fraud protection, etc.

We have already delivered a wide range of FinTech solutions, including digital wallets. To prove our experience, we’d like to present our recent case – B2B reward-based cashback service system.

Our client, a Norwegian startup, focuses on rewarding consumers for purchases made at partner shops across the Nordic countries. The goal was to create a platform where consumers and merchants could benefit from cashback services. The company sought Cleveroad’s assistance to ensure the project was delivered on time and within budget.

We’ve delivered a multifaceted cashback system with a reward-based module. One of the platform's key features is the user wallet, which allows users to manage and utilize earned cashback easily. Users can transfer their rewards to their bank accounts through Stripe integration and participate in charity campaigns where cashback donations go to charitable organizations.

As a result, our customer received a bespoke platform that enhanced user experience and met business objectives within the initial timelines, thanks to strategic team assembly and expert solutions.