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Network tokenisation to enable 85% of ecommerce transactions by 2028

Monday 4 September 2023 13:54 CET | News

A new Juniper Research study has forecasted network-tokenised transactions to enable 85% of global ecommerce transactions by 2028.

These transactions, which include online and desktop ecommerce transactions, mobile payments, and IoT transactions, are likely to see a substantial growth of 190%, reaching USD 400 billion globally in 2028, compared to USD 140.3 billion in 2023.

A new Juniper Research study has forecasted network-tokenised transactions to enable 85% of global ecommerce transactions by 2028.

According to the study, network tokenisation, the process of substituting card payment data with unique network-issued tokens, may be able to balance security and friction more effectively than other solutions. This represents a major concern for ecommerce market players. However, the repeated usability of network tokens decreases the instances a consumer is required to provide payment details, therefore promoting limited friction. 

More information on the study

The report predicts an increase in network tokenisation mandates after successfully being implemented on the market. Researchers stated that as the number of transactions and payment methods within the ecommerce sector is increasing, government bodies should implement regulations and mandates, as they represent an important opportunity for network tokenisation vendors to grow their revenue.

The Reserve Bank of India has implemented a requirement for all credit and debit card data used in online, point-of-sale, and in-app transactions to be tokenised from October 2022. Through this, payment security was enhanced, and the digital payment experience was improved. As per the bank, card data, tokens, and any other relevant details are stored in a secure mode by the token service provider, such as a card payment network or card issuer, which has been certified for safety and security that conforms to international practices and globally accepted standards.

Network tokenisation in ecommerce

Increased ecommerce transaction volumes represent an impediment for payment providers to control the growing workload, without compromising user experience or security.

According to Thales’ report, the ecommerce market is on a continuous rise, as sales are predicted to grow by 50% until 2027. Online merchants must consider how to increase their revenue, while also minimising fraud. The adoption of network tokenisation can benefit both vendors and clients, as it creates a frictionless customer experience. Moreover, by introducing tokenisation, the risk of fraud can be reduced, as now ecommerce fraud constitutes approximately 79% of all fraudulent card transactions. Tokenisation cannot prevent data breaches, however, it prevents customers’ payment information from being compromised by having it stored in a secured token vault.

In addition, network tokenisation can aid merchants in maintaining compliance, as the payment tokenisation provider should already be PCI DSS compliant, therefore transferring the responsibility from the business to a third party. 

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Keywords: ecommerce, research, PCI compliance, network tokenisation, Token
Categories: Payments & Commerce
Companies: Juniper Research
Countries: World
This article is part of category

Payments & Commerce

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Juniper Research

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