The most common type of digital wallet is an app on your phone that stores the data from your physical credit and debit cards, driver's license, tickets and more. You add the data by either inputting it off your card, syncing it with an account, or taking a photo of the card or ticket from inside the app, so your phone reads it for you.
To make purchases or redeem tickets, just enter your phone's passcode, or use ID, and then you can pay by holding your phone toward the point-of-sale device, or showing the agent your e-ticket to scan.
A digital wallet may also refer to the system online where you have inputted your payment details once and, from then on, you don't need to enter it again because the retailer or e-pay provider has stored it for you. To make purchases, you need only enter your email and password for that provider, for example PayPal.