The total number of tokenised payment transactions will exceed 1 trillion globally by 2026, up from 680 billion in 2022, and representing a growth of 58% over the next four years.
This was revealed in a study from Juniper Research which attributed this growth to the rise of ‘one-click’ solutions, such as click-to-pay. These solutions use card-on-file tokenisation to store a customer’s payment credentials, allowing them to auto-fill their checkout details and complete transactions via a single click.
Tokenisation protects customers’ payment credentials by replacing sensitive data with token values that hold no intrinsic value. This prevents bad actors from gaining access to payment data in the event of a data breach or other security incident.
The growth of tokenisation is being fuelled by a growing adoption of one-click solutions by e-commerce merchants to reduce friction, and by card networks, who are encouraging mass adoption of tokenisation at the network level to improve payment approval rates.
The report also predicts that online and mobile tokenised e-commerce volume will grow by 74% by 2026, driven by customers expecting frictionless checkout experiences.
Growth will also be driven by other benefits, such as time saving gained for users, because they don’t have to re-enter payment credentials when shopping online.
IOT payments
The research also pinpointed IOT payments as offering the largest growth amongst the tokenisation market over the next five years, with tokenised IOT transactions expected to reach 19 billion by 2027, growing 400% from just 3.8 billion this year.
Tokenisation is key to facilitating IOT payments, as it enables transactions to be made via new use cases and form factors, introducing new revenue opportunities for payment providers.
Given long development cycle of tokenisation solutions, tokenisation vendors other than advanced card networks need to start scaling their own IOT tokenisation solutions or risk missing this lucrative opportunity, Juniper syas.
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