--- path: /learn/embedded-wallets/ title: "Embedded wallets: how they work and what to evaluate" description: Learn how embedded wallets work, how custody and signing controls differ, and what to evaluate for authentication, recovery, funding, fees, and payments. image: /images/opengraph/og-learn.png publishDate: 2026-10-21 label: Enterprise timeToRead: 5 faq: - question: What is an embedded wallet? answer: An embedded wallet is a blockchain wallet integrated into an application so users can access balances and approve actions within the product. Its interface can use familiar sign-in methods, while its signing and recovery configuration determines who controls the assets. - question: Are embedded wallets custodial or non-custodial? answer: Embedding describes the product experience, not a single custody model. Wallets can give control to users, a service, or a combination of parties. Evaluate who can sign, change policies, recover access, and export keys, along with the applicable service terms. - question: Are embedded wallets the same as smart accounts? answer: No. An embedded wallet describes how wallet functionality appears in an application. A smart account describes an account implemented through smart contract logic. An embedded wallet can use a smart account, but embedding alone does not provide account abstraction or its features. - question: Can users export an embedded wallet? answer: Export support depends on the provider, account type, and application configuration. Check whether users can export a key, transfer assets to another wallet, or use another access method. Test the exit path before accepting customer funds. - question: Does fee sponsorship pay for the transfer amount? answer: No. Fee sponsorship covers eligible network fees under the sponsor's rules. The payment amount still needs to be available from the sending account or another explicitly designed funding source. Provider, conversion, and withdrawal charges can remain separate. heroTitle: "Embedded wallets: how they work and what to evaluate" seoTitle: What are embedded wallets? Control, recovery, and payments socialTitle: Embedded wallets explained locale: en canonical: https://tempo.xyz/learn/embedded-wallets/ --- # Embedded wallets: how they work and what to evaluate _An embedded wallet is a blockchain wallet integrated into an application, allowing users to access balances and approve payments within the product. The familiar interface is separate from the signing, custody, and recovery arrangements underneath it. [Contact Tempo](/contact/) to discuss embedded stablecoin payment experiences._ A marketplace can let a seller receive stablecoins without asking them to install a browser extension first. A business application can place a payment balance beside invoices and payout controls. Embedded wallets make these experiences possible by bringing wallet functionality into the product's own interface. The critical design work concerns control: who can authorize a payment, what happens when access is lost, and how the user can leave the application. ## How embedded wallets work An application integrates a wallet provider or its own wallet infrastructure. During onboarding, it creates or connects a blockchain account and associates it with the user. The application then displays balances, constructs payment requests, and obtains the authorization required to sign and submit them. The user can authenticate through email, an existing login provider, a passkey, or another supported method. Authentication establishes who is using the application. Signing authorization determines which wallet actions that person or service can perform. The implementation needs to connect them correctly. [Privy's wallet overview](https://docs.privy.io/wallets/overview), for example, distinguishes wallets embedded for direct user interaction from wallets controlled by a server. The same broad category can support different product and control models. ## Embedded describes the experience, not custody A wallet being inside an app does not tell you who controls its assets. Nor does removing a seed phrase from onboarding eliminate key management. The underlying system still needs signing credentials, access controls, and a recovery design. |Control model|Questions to resolve| |-|-| |User-controlled|What user authorization is required, and can the service act without it?| |Shared approval|Which combination of user and service approvals is required?| |Service-controlled|Who can operate the wallet, change permissions, and approve withdrawals?| These are useful technical distinctions, not universal legal classifications. Evaluate the actual signing and recovery configuration alongside the service terms. [Privy's owner and signer documentation](https://docs.privy.io/controls/authorization-keys/owners/types) illustrates user owners, application-controlled authorization keys, and quorums that combine approvals. The [stablecoin custody guide](/learn/stablecoin-custody/) provides a broader framework for evaluating asset control. ## An illustrative marketplace payment workflow Suppose a marketplace wants sellers to receive stablecoin payouts inside its mobile app. 1. **Onboard the seller.** Authenticate the user, complete the platform's required checks, and explain the wallet's control and recovery model. 2. **Create the account.** Associate the wallet address and supported network with the seller's internal account identifier. 3. **Receive the payout.** Track the platform's payment until confirmed, then display the available balance with the correct asset and network. 4. **Approve a payment or withdrawal.** Show the amount, recipient, fees, and any conversion before obtaining the required authorization. 5. **Keep the records.** Link the confirmed payment to the seller's ledger entry and show the user a usable receipt. A displayed wallet balance does not guarantee access to local bank money. Funding, conversion, withdrawals, geographic coverage, and provider eligibility remain separate product dependencies. The [crypto onramp guide](/learn/crypto-onramp/) explains how users acquire assets, while [stablecoin accounts](/learn/stablecoin-financial-accounts/) covers the broader account experience. ## Authentication, signing, and spending policies Design the approval flow around the risk of the action. Checking a balance and moving funds should not depend on an indistinguishable login prompt. Sensitive actions can require another approval or verification step where the infrastructure supports it. For automated actions, define the allowed recipients, assets, contracts, spending budgets, and expiry. [Wallet policy documentation](https://docs.privy.io/security/wallet-infrastructure/policy-and-controls) shows how a provider can constrain wallet actions. Confirm which rules are enforced at signing, by a contract, or elsewhere in the application, and how those rules can be changed. Session permissions can reduce repeated prompts, but the application needs a visible way to review and revoke them. See [session keys](/learn/session-keys/) for the distinction between delegating a permission and giving unrestricted signing access. ## Recovery, export, and provider dependence Test a lost phone, an unavailable login account, a new device, and a provider outage before launch. Define who can restore access, what proof is needed, and whether recovery changes signing authority. Export and recovery are separate capabilities. Export can let a user use a key elsewhere; recovery restores access after a failure. A key export might not reproduce every smart account permission or application feature. [Privy's user help center](https://www.privy.io/user-help-center) explicitly states that export availability depends on the application's implementation. Make the exit path concrete. Users should know whether they can withdraw assets, export a key where supported, or access the account through another interface. Explain material dependence on the application or provider before they fund the wallet. ## Embedded wallets and account abstraction An embedded wallet is an interface and integration approach. A smart account uses smart contract logic to define how an account operates. [Account abstraction](https://eips.ethereum.org/EIPS/eip-4337) refers to designs that make account validation and execution more programmable. These concepts can work together, but they are not interchangeable. Do not assume that an embedded wallet includes batching, delegated spending, recovery, or sponsored fees. Verify each feature on the intended network and account type. Fee sponsorship can remove the need for the user to hold a separate network-fee balance, but someone still pays the network fee, and the sender still needs the payment amount. ## Where Tempo fits Tempo supports embedded wallet integrations and near-instant onchain stablecoin settlement. Its [embedded wallet guide](/developers/docs/resources/guides/embedded-wallets) covers integration paths, while [fee sponsorship](/developers/docs/accounts/fees/fee-sponsorship) lets applications cover eligible network fees. The application still owns the customer experience, permission design, recovery communication, and finance records. Use [how to build a stablecoin app](/learn/how-to-build-a-stablecoin-app/) to map these dependencies, or [contact Tempo](/contact/) to discuss your payment workflow. ## FAQ ### What is an embedded wallet? An embedded wallet is a blockchain wallet integrated into an application so users can access balances and approve actions within the product. Its interface can use familiar sign-in methods, while its signing and recovery configuration determines who controls the assets. ### Are embedded wallets custodial or non-custodial? Embedding describes the product experience, not a single custody model. Wallets can give control to users, a service, or a combination of parties. Evaluate who can sign, change policies, recover access, and export keys, along with the applicable service terms. ### Are embedded wallets the same as smart accounts? No. An embedded wallet describes how wallet functionality appears in an application. A smart account describes an account implemented through smart contract logic. An embedded wallet can use a smart account, but embedding alone does not provide account abstraction or its features. ### Can users export an embedded wallet? Export support depends on the provider, account type, and application configuration. Check whether users can export a key, transfer assets to another wallet, or use another access method. Test the exit path before accepting customer funds. ### Does fee sponsorship pay for the transfer amount? No. Fee sponsorship covers eligible network fees under the sponsor's rules. The payment amount still needs to be available from the sending account or another explicitly designed funding source. Provider, conversion, and withdrawal charges can remain separate. --- ## Site links - [Tempo home](/) - [Privacy policy](/privacy-policy/) - [LinkedIn](https://www.linkedin.com/company/tempo) - [X](https://x.com/tempo) - [YouTube](https://www.youtube.com/@tempo) ### Products - [Earn](/earn/) - [Routes](/routes/) - [Zones](/zones/) ### Solutions - [Embedded finance](/solutions/embedded-finance/) - [Cross-border payments](/solutions/cross-border-payments/) - [Institutional settlement](/solutions/institutional-money-movement/) - [Agentic payments](/solutions/agentic-payments/) - [Tokenized deposits](/solutions/tokenized-deposits/) ### Developers - [Documentation](/developers) - [Tempo Explorer](https://explore.tempo.xyz/) - [Tempo API](/developers/docs/api/) - [Performance](/developers/performance) - [Status](https://status.tempo.xyz/) - [GitHub](https://github.com/tempoxyz) ### Resources - [Blog](/blog/) - [Customers](/customer-stories/) - [Ecosystem](/ecosystem/) - [Learn](/learn/) - [Reports](/reports/) - [OUSD](/ousd/) ### Company - [About](/about/) - [Careers](/careers/) - [Brand kit](/brand/) - [FAQ](/faq/)