Today, businesses and consumers have access to digital wallets, financial tools that allow them to manage their financial resources online and speed up the payment process through more efficient and secure transactions. Below, we will learn more about the history and evolution of digital wallets.
First digital wallets
Digital wallets have constantly evolved with technology and are adjusting to the needs of consumers. For this reason, it is known that digital wallets have their origin in the first digital transaction recorded in 1994, through an online purchase through the Netmarket website, which managed to sell a CD of the album “Ten Summoner’s Talk” by the singer Sting.
However, it was not until 1998 with the launch of Confinity (after its merger with X.com it was renamed Paypal) that what is known as the beginning of digital wallets was established, since users could store electronic money and make online payments through this platform.
Later, between 2000 and 2005, several systems appeared to facilitate online payments; one of these was Google Checkout (which was discontinued in 2013). Then, in 2008, Bitcoin and the concept of blockchain were introduced, which popularized the use of cryptocurrencies and paved the way for decentralized digital wallets. One of these first cryptocurrency wallets was Bitcoin Core or Bitcoin-Qt, which allowed its users to store, manage, and transact with Bitcoin.
Digital wallets for mobile payments
Between 2010 and 2015, there was a boom in smartphones, which allowed access to more online tools, which boosted the use of mobile digital wallets.
Thanks to the advancement of technology, Companies like Google and Apple launched their respective digital wallets, which allowed users to pay, store cards, tickets, coupons, accumulate loyalty points and redeem discounts by applying NFC (Near Field Communication) technology.
Around 2015, after the launch of Android software, adopted by Google, the use of digital wallets became even more popular, which were generally used to purchase or make payments for applications within the Android and iOS platforms.
Digital hardware wallets
Digital hardware wallets were introduced in 2013, which are characterized by being devices that allowed private keys to be kept offline, making them less vulnerable to piracy and providing a higher level of security and control to users, especially those who managed cryptocurrencies at that time.
Impact of the pandemic
One of the reasons for the acceleration in the adoption of digital wallets was the need for contactless payments since 2020 during the COVID-19 pandemic. This allowed users to make transactions in an easier and safer way to acquire goods and services.
Integration with DeFi and NFT
Another significant advancement that the digital wallet had during 2020 was the ability to integrate with decentralized finance (DeFi) and non-fungible token (NFT) platforms, which allowed the functionality of digital wallets to be significantly expanded.
This integration allowed users to interact with digital wallets through smart contracts, lend (and borrow) digital assets, as well as manage NFTs directly from their digital wallets.
Digital wallets today
Digital wallets have evolved to offer features beyond payments, such as management and storage of digital assets (FIAT money and cryptocurrencies), integration with payment processors, conversion between FIAT currencies and cryptocurrencies, etc. An example of this is Pilsenga’s digital wallet service, which offers a comprehensive solution since in addition to the functions mentioned above, it also offers different tools such as multi-currency IBAN accounts, dedicated IBAN accounts, payment gateway, accounting packages, batch payments, among others, integrating all these tools and functions in one place.
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