Can digital wallets hold multiple currencies?

Digital wallets are becoming a mainstay in the UK, with a 2023 report noting that 47% of people had used theirs to make a payment within the previous year.¹ The PayPal digital wallet and many other alternatives allow people to shop online and hold and exchange multiple currencies.

This article includes tips, suggestions, and general information. We recommend that you always do your own research and consider getting independent tax, financial, and legal advice before making any important decision.

This article explores the convenience of holding multiple currencies in a digital wallet and explains the benefits, potential fees, and what to consider before using one.

Convenience of multiple currencies in a digital wallet

Convenience and speed are key drivers of digital wallet adoption in the UK, with 83% of people pointing to these benefits as the main reason they chose the payment method.¹

The ability to hold various currencies may also be convenient for travellers because it simplifies managing holiday money and international transactions when abroad. For example:

• Using a digital wallet with a multi-currency capability puts an end to the need to visit physical currency converters.
• Trusted digital wallets allow users to easily switch between currencies within their wallet, which can be especially useful when visiting several countries in one trip.
• Some digital wallet features allow people to browse and select from a range of competitive exchange rates or buy from overseas retailers using their home currency.

Considerations when using a multicurrency wallet

There are, however, some things to remember when deciding which digital wallet to use for currencies or travel. These include:

• Conversion rates and fees may vary depending on the digital wallet provider. A range of fees may be associated with holding and converting multiple currencies.
• Some digital wallets may charge additional fees once one or more currency balances exceed a certain threshold.
• And some digital wallets may charge inactivity fees — along with fees to transfer funds or exchange currencies on weekends or during public holidays.

Understand conversion rates

When people need to pay or transfer in a different currency, a digital wallet may automatically convert the funds from one currency to another based on the current exchange rate, provided by the wallet.

PayPal’s currency conversion calculator, for example, can be used to check the potential currency conversion rate before completing an exchange.

Possible Fees

As with other digital wallets, PayPal fees may apply for multi-currency transactions, such as:

• transaction fees for each currency exchange
• inactivity fees if the wallet is not used regularly
• a percentage mark-up on currency conversions
• fees for returned withdrawals or bank transfers

How to choose the right digital wallet

Digital wallets regularly add new capabilities and features. Whether considering mobile payments or digital wallet safety, these features could be good to have in a digital wallet:

• Multiple currencies. Check if the wallet supports multiple currencies and offers competitive exchange rates, which are often key for those who travel frequently or need international transfers.
• Security measures. Ensure the digital wallet has robust security protocols, such as encryption, two-factor authentication, and secure login processes, to protect your financial information. Learn more about PayPal safety and security.
• Clear fee structure. Understand the fee structure for transactions, currency conversions, and any potential maintenance or inactivity fees.
• Usability. Look for a digital wallet with an easy-to-use interface that allows for activities such as statement review and expense tracking.
• Customer support. Reliable customer support is crucial if issues arise with transactions or account access.

Taking the time to research a digital wallet’s reputation and read its reviews is a good way to gauge reliability and customer satisfaction.