Core concept

Wallets for humans: Digital wallets 101

MATTR • Jan 13, 2023 • 4 min read

The digital world has been changing the way we share information for a long time. You’re probably used to digital copies of documents replacing paper ones, saving them from the threat of being lost or damaged. And, you might be used to the idea of storing boarding passes on your phone or keeping a copy of your bank card in your Apple Wallet or Google Pay app.

But, how can our phones store the other things we’re used to keeping in our physical wallets like driver’s licences or insurance cards? What sorts of things do we need to think about when using a digital wallet?

A physical wallet makes it easy to know when you’re sharing the cards inside of it, as you have to take them out and hand them over. How do you know your digital data isn’t being shared without your knowledge?

As digital wallets become a bigger and bigger part of our lives, there are heaps of questions you might have. In this article we’ll cover some of the most frequently asked questions, like:

  • What is a digital wallet?
  • How does a digital wallet fit into my life?
  • What makes a good wallet for humans?

What is a digital wallet: More than banking

A lot of us think of payments when we think of a wallet app. You may have been using the wallet app on your phone to store digital versions of bank cards, boarding passes or event tickets for a while now. With the boom of decentralised forms of currency and investment came web wallets to hold cryptocurrency and NFTs.

However, the use of digital wallets extends well beyond banking, finance and cryptocurrency.

A digital wallet is an application on a device, such as a phone or web browser, that holds digital versions of documents and assets. These digital wallets are becoming an important tool for us to use in the management of our digital identities – i.e., how we express who we are online – because they can hold information that we use to prove things about ourselves.

Proving things about ourselves online has historically posed some challenges, as we often don’t have the benefit of physically seeing the person we’re interacting with. To learn more about these challenges and how technology is working to solve them, read our introduction to digital identity.

Back to digital wallets: We call the documents that are stored in a digital wallet “credentials”. These credentials can be held insides a digital wallet, and they can often be shared with others both in person and online. Imagine a wallet that could hold more than just your bank card, but also your library card, supermarket loyalty card, a community services card or a digital version of your driver’s licence. These digital documents are machine-readable and able to be verified in real-time.

With the knowledge that a digital wallet can be for much more than banking, it holds the promise of convenience and ease. Storage for your most important documents, for instant access to the information you need, verifiable across institutions and contexts.

How does a digital wallet work for me?

Imagine you need to prove your age in order to purchase something at a store. You would likely pull out a driver’s licence or other government-issued identification and show it to the shopkeeper. They are able to inherently trust this document because it looks like other driver’s licences that are issued from official sources; it probably carries official seals and watermarks to prove it isn’t fake and hasn't been tampered with.

If we want to make this interaction digital, we need to create the same monikers of trust, plus the ability to ensure that a digital document hasn’t been forged.

A digital wallet allows us to keep our verifiable credentials safe and accessible, and it empowers us to control the data inside that wallet, ensuring our data is only shared with our explicit consent.

What makes a good digital wallet?

The world of digital identity and credentials is ever evolving and requirements for a digital wallet will vary depending on many factors. Local and national regulations; the type of credentials you want to hold and share; and access to things like a network connection or smartphone will all play a role in determining what makes a good wallet for a group of people. However, here are a few things that make the top of our list when it comes to a digital wallet that works for all:

  • Privacy and security: A good digital wallet will be designed with security and privacy in mind. The wallet itself shouldn’t hand over your identity credentials without consent. Users should have confidence that their digital wallet will play a role in helping to securely store not just their credentials but the interaction history. This is a whole topic in its own right – read our introduction to decentralised identity to get started.
  • Consent: As part of managing privacy, a wallet that gives users control also means requiring users to consent to their information being shared. A good digital wallet should inform users of exactly which information will be shared and with whom; and, ideally, should allow only the data needed from a specific credential to be shared and unnecessary info to be excluded. This is called selective disclosure.
  • Convenience: A wallet is only useful if people who you want to share information with trust the credentials inside it and are able to interact with it. A good digital wallet should be interoperable, meaning it bridges the gaps for users from the multiple institutions that both want to issue digital credentials to them and those wanting the verify information about them. Read more about why a wallet needs to be interoperable. It should also be easy to use with an interface that is simple, clear and relatable.

See it in action

To help you get your head around this vital piece of the digital trust puzzle, we’ve created a completely make-believe society to issue demo documents. The irony is not lost on us here at MATTR that we are creating fake credentials to demonstrate how digital trust works! Our demo from the Kingdom of Kakapo* lets you see a digital wallet for yourself and claim digital credentials (completely made up) in real time on your smartphone.

First, you'll need to download MATTR’s Getting Started Wallet from the App Store or Google Play Store. Then, follow the steps laid out at You’ll collect a digital passport, bank account and power bill in the imaginary Kingdom of Kakapo and see just what you can do with simple digital credentials.

If you’re ready to explore how a digital wallet could work for your business in the real world, read more about MATTR’s wallet solutions.

*The fictional Kingdom of Kākāpō derives it's namesake from a beloved New Zealand native bird.

Wallets in the wild: Further reading

The MATTR Wallet, part of our suite of solutions for the whole lifecycle of digital credentials, showcases best in class technology in digital wallets. We have solutions available in different packages to suit your unique business needs. Read about how you can implement a digital wallet into your project with our article: Wallets in the wild. Or, get in touch with us today to discuss the best options for your organisation.