Which statement best describes a digital wallet?

Which statement best describes a digital wallet?

• A. It enables contactless payment at the point of sale without a physical card.
• B. It requires a physical card for every purchase.
• C. It is a type of savings account.
• D. It is only used for online shopping.

Answer: (A)

A digital wallet is a payment tool that stores your payment details securely on a device and lets you pay without using a physical card. When you make a purchase, it can use contactless technology (like tapping with your phone or smartwatch) at the point of sale, often using tokenization so merchants never see your actual card number. That’s why the description that it enables contactless payment at the point of sale without a physical card fits best. It isn’t a savings account, so it doesn’t describe a place to store savings funds. It isn’t limited to online shopping either; many digital wallets work for both online and in-store transactions. While you can link a card to a digital wallet, you don’t need the physical card present for every purchase, which is why the other options don’t fit as accurately.

A digital wallet is a payment tool that stores your payment details securely on a device and lets you pay without using a physical card. When you make a purchase, it can use contactless technology (like tapping with your phone or smartwatch) at the point of sale, often using tokenization so merchants never see your actual card number. That’s why the description that it enables contactless payment at the point of sale without a physical card fits best.

It isn’t a savings account, so it doesn’t describe a place to store savings funds. It isn’t limited to online shopping either; many digital wallets work for both online and in-store transactions. While you can link a card to a digital wallet, you don’t need the physical card present for every purchase, which is why the other options don’t fit as accurately.