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Mastercard commits to 100% e-commerce tokenisation in Europe by 2030

Mastercard aims for 100% e-commerce tokenisation in Europe by 2030, replacing traditional card numbers with secure tokens. This initiative enhances online payment security, reduces fraud, and streamlines the checkout process, benefiting consumers, merchants, and issuers alike.

  • Marina Mouka
  • June 13, 2024
  • 4 minutes

Mastercard has announced its vision to achieve 100% e-commerce tokenisation in Europe by 2030. This initiative aims to phase out manual card entry, making online shopping safer and more accessible. By leveraging tokenisation, Mastercard seeks to replace traditional 16-digit card numbers with secure tokens, significantly reducing fraud risks.

This vision aligns with Mastercard’s global commitment to enhance online payment security and streamline the checkout process. As digital and physical payment experiences converge, Mastercard is dedicated to creating a seamless, secure, and consistent online shopping experience across all devices and platforms.

“As physical and digital experiences continue to converge, we’re pushing the boundaries of what’s possible,” said Jorn Lambert, Chief Product Officer at Mastercard. “We’re focused on bringing best-in-class digital services together to deliver more value, access and safety to our customers and the end-consumer. We’ll continue to harness the potential of these technologies to deliver enhanced security, better experiences and overall, new ways to pay.”

How tokenisation works

Tokenisation replaces the traditional 16-19 digit card number with a randomly generated token. This token is unique to each transaction and can only be used within the specific context it was created for, significantly reducing the risk of fraud.

Mastercard is making it easier for merchants to embed Click to Pay into their sites, eliminating the need for manual card entry. This integration is supported by partnerships with banks and fintechs, ensuring that consumers can enrol their cards seamlessly.

In addition to tokenisation, Mastercard is introducing payment passkeys that leverage biometric authentication via mobile devices. This eliminates the need for passwords and one-time codes, further streamlining the checkout process.

By combining these technologies, Mastercard aims to create a consistent and secure online payment experience across all devices, browsers, and operating systems, making e-commerce as seamless as contactless payments in-store.

Strategic partnerships and security improvements

Mastercard is collaborating with a diverse array of stakeholders, including banks, fintech companies, and merchants, to implement its tokenisation vision. These partnerships are crucial for embedding Click to Pay functionalities into merchant sites and facilitating seamless card enrolment for consumers.

Tokenisation is at the heart of Mastercard’s strategy to combat online payment fraud, which is projected to exceed $91 billion by 2028. By replacing traditional card numbers with secure tokens, the risk of fraud is significantly minimised. These tokens are unique to each transaction, making it nearly impossible for bad actors to misuse them.

Another critical security enhancement is the automatic updating of tokenised cards. This feature ensures that consumers’ payment information remains current without requiring manual intervention, thereby reducing the chances of outdated or compromised data being used.

Tokenisation not only reduces fraud but also improves transaction approval rates. Secure tokens are more likely to be approved by issuers, leading to fewer declined transactions and a smoother checkout experience for consumers.

Benefits for consumers, merchants, and issuers

For consumers: Consumers will enjoy faster, more secure checkouts, thanks to tokenisation and biometric authentication. The elimination of manual card entry and passwords simplifies the online shopping experience.

For merchants: Merchants benefit from increased sales and higher approval rates. The secure nature of tokenised transactions reduces fraud, providing a safer environment for both buyers and sellers.

For issuers: Issuers gain top-of-wallet status and enhanced customer security. The automatic updating of tokenised cards ensures that payment information is always current, reducing the risk of declined transactions and improving overall customer satisfaction.

Europe takes charge of payment innovations

Europe has long been a pioneer in payment innovations, setting the stage for Mastercard’s ambitious tokenisation initiative. The continent’s early adoption of contactless payments exemplifies its forward-thinking approach.

Introduced in 2014, Mastercard’s tokenisation service already secures 25% of global e-commerce transactions, with adoption accelerating by 50% year-over-year. This momentum underscores Europe’s readiness to embrace advanced payment technologies.

“In Europe, we have seen tokenisation gaining momentum across the ecosystem; the convenience and reduced rates of fraud sell themselves,” commented Valerie Nowak, Executive Vice President, Product & Innovation, Mastercard Europe. “We are confident that reaching this vision by 2030 is a win-win-win for shoppers, retailers and the card issuers alike.”

By targeting 100% e-commerce tokenisation in Europe by 2030, Mastercard aims to leverage this innovative spirit, making online payments as seamless and secure as in-store transactions, and reinforcing Europe’s role as a leader in digital payment solutions.