A recent survey by McKinsey & Company found that roughly nine in ten consumers in both the United States and Europe report having made some form of digital payment over the past year, with the United States reaching a new high at 92 percent. The survey defines “digital payments” as those made in digital environments, such as websites, apps, or in-store through a dedicated app such as a digital wallet.
Digital wallets are mobile applications which can be linked to an electronic payments card or bank account. They can be used for making payments and storing electronic cards (payments, transit and others) and tickets (for transit, sporting and cultural events, movie theaters etc.). The most common forms are “original equipment manufacturer (OEM)” wallets like Apple Pay, Google Pay, and Samsung Pay, which are wallet solutions built and deployed by the manufacturer of the smartphone, tablet, or other electronic device. These wallets can be used to make payments and access other financial services utilizing a smartphone and are generally tailored to the device’s features and capabilities.
Tokenization
In order for debit, credit, or prepaid card data to be used by a digital wallet, that card must be capable of enabling “tokenization”. Tokenization is a security process that replaces sensitive payment data (like a 16-digit card number, CVV, or expiration date) with a randomly generated, unique identifier called a token.
This token has no exploitable value outside its specific use case and is meaningless if intercepted by hackers. The real card details are securely stored by a trusted entity (often a card network or token service provider, like Mastercard, or Apple/Google themselves).
Direct Express® and Digital Wallets
With an estimated 80 percent plus of Direct Express® beneficiaries owning a smartphone and increasing use by cardholders of the Direct Express® Mobile App (DX℠) to manage their money, it made sense for Direct Express® to work toward the tokenization that would allow the use of digital wallets.
This functionality became available last year, and cardholders have begun to add their cards to digital wallets. Digital wallets allow Direct Express cardholders the convenience of “tap to pay” using their phones, while tokenization ensures the heightened security.
As of July 2025, around 60,000 Direct Express® cardholders had added their cards to Google Pay or Apple Pay, tallying between 80,000 and 90,000 total monthly transactions. The number of cardholders using digital wallets is sure to increase as awareness of this functionality spreads.
Providing unbanked federal beneficiaries with the ability to utilize payment apps through a network branded prepaid card is a function that perhaps was not foreseen 17 years ago when the Direct Express® card was first introduced. Nevertheless, coupled with the card’s ability to safely store funds protected by the FDIC and Regulation E, the tap-to-pay function enabled by a digital wallet, is another way Direct Express® is providing significantly enhanced financial capability for its millions of cardholders.
SOURCE: Direct Express®
