Digital Wallets for Merchants: What You Need to Accept Apple Pay and Google Pay
More customers are reaching for their phone or watch at checkout instead of a physical card, and that shift is being driven almost entirely by digital wallets like Apple Pay and Google Pay. This guide covers what digital wallets actually are, what a business needs to accept them, and the practical trade-offs worth understanding before you decide how much to lean into contactless payments.
What a Digital Wallet Actually Is
A digital wallet is an app, usually built into a phone or smartwatch, that stores a customer's card information securely and lets them pay by holding the device near a contactless reader instead of inserting or swiping a physical card. Apple Pay and Google Pay are the two most common examples in the United States, and both work the same basic way from a merchant's perspective: the customer taps their device, the transaction completes over near-field communication, or NFC, and the sale is authorized in seconds.
Behind the scenes, digital wallets do not transmit the customer's actual card number to your terminal at all. They use a device-specific token generated for that phone and that merchant relationship, which is one reason digital wallet transactions are generally considered lower risk than a traditional card swipe. The customer's bank still ultimately approves or declines the charge, so from an accounting standpoint a wallet payment behaves exactly like any other card transaction once it settles.
What Equipment You Need to Accept Digital Wallets
The core requirement is a contactless-capable card reader or terminal, sometimes labeled with the NFC symbol or the words tap to pay. Most payment terminals sold in the last several years already include this capability, but it is worth confirming with your processor rather than assuming, especially if you are running older hardware that predates widespread contactless adoption. For businesses that primarily take payments on a smartphone rather than a dedicated terminal, tap to pay on iPhone lets the phone itself act as the reader, with no additional hardware required beyond the phone and a compatible payment app.
On the software side, your point-of-sale system or payment gateway needs to be configured to accept NFC and digital wallet transactions, which is typically enabled by default with most modern processors rather than something you have to request separately. If you are unsure whether your current setup supports it, the fastest way to find out is to simply try tapping a phone against your existing reader, since compatible hardware will usually prompt for it automatically.
How Digital Wallet Fees Compare to Standard Card Payments
In most setups, digital wallet transactions are processed and priced the same as any other card-present or contactless transaction, using your existing interchange and processing rates. There is not usually a separate wallet surcharge from your processor. That said, some card networks apply a marginally different interchange category to contactless or wallet transactions, so it is worth asking your processor for a straight answer on how these transactions are categorized on your statement rather than assuming they are identical line by line. Reviewing a statement periodically to compare wallet and non-wallet transactions of similar size is a reasonable way to confirm there is no meaningful pricing gap in practice.
Why Digital Wallets Tend to Reduce Fraud and Chargebacks
Because digital wallets rely on device-specific tokens rather than the underlying card number, a compromised wallet transaction does not expose usable card data the way a skimmed magnetic stripe or a leaked card number does. Wallets also typically require the customer to authenticate on their device, whether through a fingerprint, face recognition, or a passcode, before the payment completes, adding a layer of identity verification that a simple card swipe does not have. Merchants who accept a meaningful share of digital wallet volume often see this reflected in lower chargeback rates tied to lost or stolen card fraud specifically, since the wallet's authentication step screens out a category of fraud that a bare card number cannot catch on its own.
Setting Up Digital Wallets for Online and In-App Payments
Digital wallets are not limited to in-person tap payments. Apple Pay and Google Pay both support online and in-app checkout, letting a customer complete a purchase with the same tap-and-authenticate flow instead of manually typing a card number and billing address into a form. For online businesses, this usually means adding a wallet payment button through your gateway's checkout integration, which most modern gateways support as a standard option rather than a custom build.
The main benefit for online sellers is a faster, lower-friction checkout, which tends to reduce cart abandonment compared to a customer having to locate a physical card and type in every digit. Because the payment details are already saved and verified on the customer's device, a wallet checkout can often be completed in two or three taps, which matters most on mobile devices where typing a long card number is the most common point where a shopper gives up and leaves.
Digital Wallets and Loyalty or Repeat Customers
Because a digital wallet token is tied to the customer's device rather than a single purchase, returning customers who paid with Apple Pay or Google Pay once will generally find the same option available and pre-filled on their next visit to your site or app, without you needing to build a separate saved-card feature. For businesses that see a lot of repeat traffic, whether that is a subscription service, a salon taking recurring bookings, or an e-commerce store with loyal customers, this can meaningfully shorten the path from browsing to a completed sale, since there is one less form to fill out each time.
How Expedio Payments Helps
Expedio Payments' gateway and terminal setups support Apple Pay, Google Pay, and tap to pay on iPhone out of the box, so accepting digital wallets does not require separate hardware purchases or a lengthy setup process in most cases. If you are deciding between upgrading your in-store terminals or enabling tap to pay through an existing iPhone, or you want wallet buttons added to your online checkout, our team can walk through what your current setup already supports and what, if anything, needs to change.
Frequently Asked Questions
Do I need a new merchant account to accept Apple Pay or Google Pay?
No, in most cases digital wallets run through your existing merchant account and processor. What you need is contactless-capable hardware or a compatible payment app, not a separate account.
Are digital wallet payments more expensive to process than regular card payments?
Generally no. Digital wallet transactions are typically processed at the same interchange and processing rates as other card-present or contactless transactions, though it is worth confirming the exact categorization with your processor.
Can I accept Apple Pay without a physical card terminal?
Yes, if you use tap to pay on iPhone, which turns a compatible iPhone into the payment terminal itself, letting customers tap their own device against your phone to pay.
Is Google Pay accepted anywhere Apple Pay is accepted?
Almost always. Both rely on the same NFC contactless technology and the same underlying card networks, so a reader that accepts one nearly always accepts the other.
Do customers need a special app to use a digital wallet in my store?
No. The wallet app, such as Apple Pay or Google Pay, is already built into their phone or watch, and they simply hold the device near your contactless reader to pay.