PayIt Announces $90M Growth Investment

Learn more

How digital wallets enhance citizen experience

Modern Data Platform

Digital wallet apps: What they are and why they’re key to your digital transformation

Key points:

  • More consumers than ever use digital wallets for online and in-person transactions.
  • Government digital wallets can increase online revenue collection for state & local organizations.
  • Digital wallets can help agencies control payment-related costs.

Digital wallets used to be a nice-to-have for government agencies. Now, after a year of contactless and remote payments, a convenient and secure digital payment storage tool is more important than ever.

Public interest in digital wallets accelerated in 2020 and remains higher than it was before the pandemic restricted in-person activities. Now that so many consumers have discovered the convenience of digital wallets for making purchases, they’re coming to expect the same options from their state and local governments.


Web searches for “digital wallet,” Google Trends

Digital wallets benefit government organizations, too. From increasing online revenue collection to reducing employee time spent on payments and reconciliation, digital wallets can help agencies operate more efficiently and find cost savings.

What exactly is a digital wallet?

Like the wallets you carry in your bag or pocket, digital wallets come in a variety of brands and styles, but they all serve the same purpose: to securely store your payment methods, identification and other important documents so you can use them when you need them. Payment methods can include credit cards, gift cards and debit cards to allow payments directly from a user’s bank account.

The best-known digital wallets, like Google Pay and Android Pay, let users make purchases online or through a mobile device without having to key in their information each time, and they work wherever those payment methods are accepted. That can be in a mobile app, on a website or at a contactless point-of-sale terminal.

However, merchants like Amazon offer their own digital wallets to their customers, so their customers can store and access order histories, important documents, loyalty card points and other information.

The merchant-specific digital wallet model also works for government agencies, by allowing them to offer a wallet that meets government security and compliance requirements and that can store important documents like digital versions of driver’s licenses, business permits and state park passes.

Digital wallet vs mobile wallet vs e-wallet?

These terms are mostly interchangeable. A mobile wallet is just a digital wallet (aka an e-wallet) that’s built to  work on smartphones and tablets.

Digital wallet is by far the most common term of the three:

analytics payit


Google trends

Digital wallet payments are quickly becoming table stakes for organizations that want to deliver a good user experience.

Digital wallets help agencies meet residents’ preferences for convenience. 78% of consumers now use at least one digital payment method, and more than half use two or more digital payment methods, according to McKinsey data.


Governments can unify some or all of their services through one digital wallet, by working with a vendor to integrate their back-end systems into the wallet platform.

Citizens who choose to create a wallet account use it to pay for services and access documents securely and quickly through the agency’s desktop and mobile websites and the agency’s mobile app. Examples of services that citizens can access through one digital wallet include:

    • Utilities
    • City and county court fees, fines and tickets
    • Vehicles
    • Toll and turnpike fees
    • Property taxes
    • Professional and recreational licenses
    • Vital records

With these services all accessible through the digital wallet, citizens can take care of their business quickly and on time, set up automatic payments and renewal reminders and come away from the experience feeling more satisfied with the services their government provides.

Digital wallets also help meet residents’ desire for safety. Contactless in-person digital wallet payments are 15% more popular now than pre-pandemic, per McKinsey, because fewer people want to swipe credit or debit cards through a terminal that countless other people have touched.

Government offices that support digital wallet point-of-sale transactions can take payments without residents or employees handling the payment terminal, cash or paper receipts.

US digital paymers

Digital wallets streamline government services transaction processing

Digital wallets can help governments increase online revenue collection. After the launch of its digital wallet platform, the City of St. Louis saw a  98% increase in online revenue collected from 2018 to 2019–$88 million (and counting) in total online revenue collected.

Digital wallets secure and speed up payment processing. With real-time processing and PCI Level 1 fraud protection, organizations typically enjoy a faster time to revenue while incurring fewer costly chargebacks – reversals of charges made by customers who say that the payment was unauthorized.

“When a chargeback happens, the merchant is hit with a chargeback fee, which typically ranges from $20 to $100. The more chargebacks you get, the higher the fee and risk of losing your account.”

U.S. Chamber of Commerce

Real-time database updates reflect credits faster. Instead of waiting hours or days for payments to be credited to residents’ accounts, those updates happen in real time. That saves employees time on manually looking up account statuses. It can also reduce the number of  late notices and warrants issued after payments have been made.

“In February 2018, payitSt.Louis expanded to include municipal court payments… Citizens can now search for and pay their court citations with payitSt.Louis. This is all verified in real time, ensuring citizen’s cases reflect payment immediately.”

Real-time updates also give budget managers and financial officers clear, immediate visibility into the organization’s revenue stream.

Automated reconciliation saves employee time and reduces the risk of errors. Digital wallets can reconcile accounts much faster than people can, without the risk of introducing data-entry or calculation errors.

“Having one vendor for all payments has streamlined the reconciliation process for the city. With payitSt.Louis, the Collector of Revenue’s office can easily reconcile all payments and ensure the same process no matter the service line.

Digital wallets reduce time, costs and security risks related to processing paper bills and checks. By offering paperless billing through the digital wallet, agencies can reduce their paper billing costs. According to Bank of America, processing a single business check costs $4 to $20, after you factor in the cost of “check stock, stamps, envelopes and the time spent writing, mailing, collecting and reconciling payments.”

That figure doesn’t factor in the costs of identity theft and forgery, which can happen when mail thieves steal bills and checks from the mail. Mail theft is on the rise nationwide, and thieves often target mail sent between government agencies and citizens.

Digital wallets can contribute to a better employee experience. CPA Practice Advisor reports that among accounts payable professionals whose departments have adopted digital wallets, nearly three-quarters are “very” or “extremely satisfied” with them.

Digital wallets give governments a fast, secure way to communicate with citizens

Paper notices are costly to mail, take time to arrive and can easily be lost or ignored. Digital wallet notifications, through the app and through email, can help governments and residents stay in touch and share information faster, at a lower cost, including information about:

    • eBills: Citizens receive their bills for government services like utilities and trash pickup in their digital wallet, so they never have to wonder if a bill has been lost in the mail.
    • Payment reminders: For citizens who choose not to use AutoPay, reminders in the digital wallet can help them pay on time and avoid late fees.
    • Receipts and payment histories: No more needing to call to request paper copies of receipts or ask an employee to look up a past payment. Citizens can see their payment history in their digital wallet.
    • Late notices: Timely notification of overdue payments in the wallet can help customers avoid extra penalties and collections costs.
    • Instant document access: When a citizen renews a professional license or a business owner buys a permit, they have proof of their status right away in the wallet, instead of having to wait for the mail or visit a government office in person.
    • Customer service access: Chatbot help and one-tap access to tech support within the digital wallet helps customers get the information they need fast.
    • Emergency notifications: The digital wallet gives governments another channel for reaching citizens during a crisis or service interruption, to share important updates.

In early 2020, as the city’s 2019 earnings tax payment deadline drew near and the COVID-19 pandemic spread,  the city needed a way to move those tax payments and in-person services online fast.

More than half of all adults living in St. Louis, MO, have payitSt.Louis accounts, so PayIt helped the city launch its online tax payment page in a few days, allowing the city to collect more than $2,000,000 in online payments while protecting public health.  Learn more.

Digital wallets give your agency valuable data analytics capabilities

When your agency has its own digital wallet platform, you can easily analyze your billing, payment and revenue data for more accurate budget and business process planning. You can also evaluate user data to keep improving the way the digital wallet works so that you see more use by citizens.

With this kind of data analytics capability from your digital wallet, your agency can create a “virtuous cycle” that drives continuous improvement in organizational efficiency as well as clearer communication with citizens and more citizen support for your agency.

Learn how your agency can implement a digital wallet

We’ve helped state and local governments across the country serve more than 80 million citizens with secure, compliant and easy-to-use digital wallet technology—going from planning to launch in as little as 90 days at no cost to the agency.

Want to see what we can do for you? Schedule your customized PayIt demo.