Mastercard plans to make manual card number entry obsolete for online payments in Europe by 2030… without sacrificing the security of online transactions, thanks to tokenization. This technology involves replacing the 16-digit card number with a random “token,” making the card information unusable for fraudsters.
Tokenization comes into play
Valerie Nowak, vice president at Mastercard Europe, said that in Europe, “ we have seen tokenization gain popularity across the ecosystem. The convenience and reduced fraud rates speak for themselves. We are confident that by 2030, this vision will benefit buyers, retailers and card issuers. »
Mastercard’s initiative is not only a security measure, but also an improvement in user experience. Consumers will no longer need to enter their card number each time they make a purchase, or remember their passwords. Instead, they will be able to use passkeys and biometric authentication, such as a fingerprint, to make one-click payments.
Tokenization plays a crucial role in reducing fraud. According to a study by Juniper Research, losses due to online fraud are expected to exceed $91 billion by 2028, with a total of more than $362 billion globally over the next five years. Mastercard’s tokenization, by securing approximately 25% of online transactions on its network, has already shown a significant reduction in fraud.
Another advantage of this technology is that tokens, unlike traditional card numbers, have no intrinsic value. If a token is stolen, it is useless to cybercriminals. Additionally, tokenization eliminates the need to reissue a new card if lost or stolen, as tokens can be updated automatically where they are stored.
Credit cards have evolved over the decades, from magnetic strips to microchips to contactless payment. Mastercard is banking heavily on this new technology to make online payments as seamless as contactless payments in stores.
The adoption of tokenization in Europe is facilitated by the willingness of European consumers to embrace new financial technologies. The continent has been a pioneer in contactless payments and online banking, much more so than in the United States where the magnetic strip on bank cards has not yet completely disappeared.
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