What is wallet-as-a-service (WaaS)?

WaaS lets companies offer digital wallets without the need to build the infrastructure that powers them. It’s a way to add secure, compliant wallet capabilities through APIs.

How does wallet-as-a-service work?

WaaS platforms take on the behind-the-scenes work of managing digital value safely and at scale. They handle secure storage, transactions, and compliance infrastructure, so businesses can channel their efforts elsewhere.

Here’s how WaaS actually works.

It builds wallets through APIs

WaaS enables developers to create and manage wallets through simple API integrations. Rather than designing a ledger system or building cryptographic tooling from scratch, a business can connect to a provider’s API. A WaaS platform can create wallets for new users and generate and store encryption keys. Through the WaaS API, users can then check balances, initiate payments or transfers, and more.

It protects private keys

WaaS providers use techniques such as trusted execution environments (TEEs), hardware security modules (HSMs), or multi-party computation (MPC) to protect private keys, combined with multifactor authentication and continuous security monitoring. Depending on the business’s needs, the setup can be custodial (where the provider holds the keys) or non-custodial (where users retain control of their keys).

It validates the transaction

When a user sends money, redeems a reward, or transfers crypto, the business’s application communicates directly with the WaaS API. The wallet provider signs the transaction and performs ledger or blockchain operations, and then returns the updated balance to the business’s app in real time.

What are the benefits of using wallet-as-a-service?

Adding a wallet feature has always been a technical and regulatory maze. WaaS turns a long build into an API integration, and there are many advantages associated with adopting WaaS in your business.

Here’s what you can seek to gain:

• Fast time to market: With WaaS, developers plug into prebuilt infrastructure and go live quickly.
  
  

• Lower development and maintenance costs: The cost of hiring engineers for encryption, custody, and compliance can outpace the cost of integration. Many WaaS platforms operate on a pay-as-you-grow model, so your spend scales with usage. You also offload ongoing maintenance such as security patches, audits, and network updates to a specialist provider.
  
  

• Security and compliance support: A mature WaaS platform applies rigor similarly to the way a regulated financial institution does. Data is encrypted in transit and at rest, keys are secured through trusted execution environments (TEEs), hardware security modules (HSMs), or multi-party computation (MPC), and fraud detection systems continuously monitor activity. Know Your Customer (KYC) and anti-money laundering (AML) capabilities can be integrated for regulated assets.
   

• Scalability and flexibility: WaaS platforms are designed to scale. As your user base grows, so can the infrastructure. Many support multiple currencies and asset types, so it’s easy to expand into new markets or add a new stablecoin or rewards currency.
  
  

• Logical customer experience: Even though the infrastructure is outsourced, customers interact with your branding, user experience (UX), and support, not that of a third party.

How is wallet-as-a-service used across different industries?

Wallet as a Service isn’t confined to fintech startups. It’s now part of how many industries manage value, build trust, and retain customers.

Here are some examples of how wallet-as-a-service is applied.

Fintech and financial services

WaaS helps financial innovators to move faster and stay within regulated frameworks.

WaaS can:

• Add multi-currency accounts or digital-asset wallets without the need to hire cryptography teams
  
  

• Hold and convert funds across currencies securely for remittance and cross-border transfers
  
  

• Manage crypto custody through WaaS providers that meet strict security and compliance standards

Ecommerce and marketplaces

Ecommerce platforms and marketplaces use WaaS to move money in a closed loop and give businesses or users “wallet”-like balances backed by licensed banks.

WaaS can:

• Send payouts directly into in-app balances
  
  

• Store refunds or credits that users can re-spend
  
  

• Integrate loyalty rewards and store credits into a single, unified balance

Gaming and digital entertainment

In gaming, WaaS supports the ownership economy by keeping digital assets verifiable and portable.

WaaS can:

• Issue wallets automatically at player signup
  
  

• Move in-game currencies, non-fungible tokens (NFTs), or rewards through secure APIs
  
  

• Process transactions nearly instantly, without exposing private keys or blockchain complexity

Retail, loyalty, and brands

Retailers and brands are adopting loyalty programs into digital wallets that keep customers active in their ecosystems.

WaaS can:

• Issue and redeem points, tokens, or gift balances
  
  

• Manage balances directly within the app
  
  

• Increase engagement by bringing payments and rewards together

  
  

What considerations come with adopting wallet-as-a-service?

Wallet as a Service simplifies many of the difficult parts of handling digital value, but it’s not always instant magic.

Here are the factors you should be aware of.

Regulation and compliance

If you custody money or digital assets on behalf of your customers, you likely fall under financial ruling. Even if your provider manages KYC, AML, or licensing, your business still shares responsibility. Before you launch, confirm how the provider’s compliance framework fits with your markets, and how customer funds are held and insured.

Security and reliability

WaaS providers invest heavily in custody and encryption, but the protection becomes part of your brand promise. If their system falters or a vulnerability isn’t caught, users might blame you. Doing due diligence on a provider is a strategic choice, so pay close attention to how they secure keys, segment data, and recover from incidents.

Dependence and design

Integrating a wallet service links your roadmap to theirs. APIs, data models, and upgrade cycles become shared infrastructure. Mitigate that dependency early. Plan for export paths, multi-provider redundancy, and governance around version changes.

Privy allows you to launch your own global wallet in just a few clicks. Customizable user interfaces (UIs), user identity management, and strong access controls simplify embedding a digital wallet. Learn more about Privy’s wallet infrastructure.