Mastercard has set itself the target of using tokenisation and biometrics to eliminate manual card entry, passwords and one-time codes for online purchases by 2030.
Editorial
This content has been selected, created and edited by the Finextra editorial team based upon its relevance and interest to our community.
As e-commerce continues to soar, fraud rates remain seven times higher online than in stores as criminals exploit exposed card numbers, creating headaches for cardholders and huge losses for merchants and card issuers.
In addition, according to Mastercard research, nearly two-thirds of shoppers still struggle through manually entering their card details, with 25% of carts abandoned because checkout is too complex or slow.
Introduced by Visa and Mastercard in 2014, tokenisation replaces the 16-19-digit number on the payment card with a secure token, reducing fraud and improving approval rates. The technology reduces cart abandonment and grows transaction approvals by three to six percentage points across regions, generating up to $2 billion in additional global sales for merchants each month.
Today, more than 30% of Mastercard transactions worldwide are tokenised through the firm’s Digital Enablement Service, with key markets like India nearing 100% for e-commerce. Having already set itself the target of hitting 100% e-commerce tokenisation in Europe by 2030, the US giant has now made the commitment global.
The company is also bidding to kill off passwords and one-time codes within the next few years. This year it began introducing the Mastercard Payment Passkey Service in India, Singapore and the United Arab Emirates.
The system replaces one-time codes with device-based biometric authentication methods such as fingerprints or facial scans and tokenisation to secure a consumer’s online checkout interaction, ensuring that no financial account data is shared with third parties – rendering it useless to fraudsters and scammers.
The final tool in Mastercard’s effort is Click to Pay, which enables users to load multiple cards on to their mobile device and shop online at guest checkouts without having to input card details and passwords.
“Just like the transition from signing and swiping to tapping cards, we’re now moving from manual entry and passwords to seamless and secure payments in just a few clicks. With this shift we are protecting sensitive data through advanced encryption and tokenisation technologies,” says Jorn Lambert, chief product officer, Mastercard.
