A method and apparatus is provided for constructing and using a smart wallet with automatic selection when making a purchase in an online environment. In one embodiment of the invention, the wallet service first finds the intersection of acceptable instruments between a merchant and a user. The wallet service then intelligently selects, or at least ranks in order, the payment instruments based on value to the customer. The ranking can take into account: a) cash back rates; b) mileage rates for the specific potential purchase; and c) temporal discounts such as shipping or coupon discounts for the specific product type; etc. The system preferably presumes that a smart wallet is given information about a transaction, and has collected information about the payment instruments.