Understanding the Technology behind Digital Wallets: NFC, QR Codes, and Biometrics

Digital wallets have become a cornerstone in today’s payment landscape in India. They have become exceedingly popular and widely adopted while driving up accessibility meaningfully.

In today’s digital age, they are a convenient and secure payment method. Whether purchasing groceries, booking a ride, or shopping online, a digital wallet is used everywhere and has revolutionised how we transact.

But have you ever wondered how a digital wallet works? Let us explore the technology behind digital wallets and understand the mechanisms that power them.

What is a digital wallet?

Also known as an e-wallet or mobile wallet, they are virtual wallets which allow users to store their funds, make transactions, and track payment histories all from an application.

This can be used anywhere and everywhere it is accepted, allowing you to transact cashless without needing to worry about carrying cash or change. Paying directly from your wallet to another person or merchant is also convenient.

What are the Benefits of using Digital Wallets?

Digital wallets offer several advantages over traditional payment methods, such as:

1. Convenience: With a digital wallet, you can carry all your payment information in one place, eliminating the need to carry physical currency such as cash or cards everywhere. You can use your phone to make payments with just a few taps, saving you time and hassle.

2. Security: Digital wallets employ advanced encryption and tokenisation to protect your payment information. Additionally, biometric authentication adds an extra layer of security, reducing the risk of unauthorised access.

3. Rewards and Offers: Many digital wallets offer rewards programs, cashback incentives, and exclusive discounts. Using a digital wall lets you take advantage of these perks and save money on purchases.

How a Digital Wallet Works?

1. Near Field Communication:

NFC is a technology that allows wireless communication between nearby devices. Many digital wallets utilise NFC to facilitate contactless payments. All you need to do is tap your smartphone on the payment machine, and your transaction will be completed quickly and securely.

2. QR Codes:

QR codes are 2-D barcodes which, when scanned and read by a computer, carry information like URLs, menus, and identification data. Because of this, digital wallets have become so popular and accessible. Digital wallets often use QR codes to both request and send money to whom you are transacting. When making a payment, the wallet generates a unique QR code containing the payment details, which can be scanned to make the payment.

3. Biometrics:

Biometrics are used to add an extra layer of security to your money. It uses the mobile’s built-in biometric sensors, such as fingerprint scanners or facial recognition, to authenticate whether you are who you say you are.


As digital wallets continue to gain popularity in India, it is vital to understand the technology behind them to make the most out of it. It allows you to remain safe and secure while you enjoy the growing benefits and conveniences of using digital wallets.

Thus, knowing about some technology like NFC, QR codes, and biometrics helps you make the most of this modern payment method.

This is why I use Bajaj Finserv’s app, which provides extra security along with access to the Bajaj QR code scanner, which allows users to quickly scan QR codes to make payments, eliminating the need for manual entry of payment details, thus streamlining the payment process and making it easier in a pinch.

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