A digital wallet is a technology service that helps a person make electronic payments by managing payment details, authentication data, or tokenised funds. Depending on the arrangement, the service may hold or connect to a payment account, or it may simply pass the relevant payment details to the recipient's payment system. Its capabilities and relationship to customer funds vary according to the provider and wallet model.
Source: European Central Bank (ECB) (source). This glossary entry is an independently worded adaptation of the cited information.