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LONDON – The experience of online payment products and services is likely to look very different in the coming years.
Starting from 2030, MasterCard Europeans will no longer be required to manually enter their card number when checking out online – regardless of the platform or device they use.
Mastercard will announce during a fireside chat with CNBC on Tuesday that all cards issued on its European network will be tokenized by 2030.
In other words, we will replace the 16-digit card numbers we are used to making transactions with with randomly generated “tokens.”
The company said it has been working with banks, fintechs, merchants and other partners to phase out manual swipes for e-commerce in Europe by 2030, in favor of one-click buttons across all online platforms.
Mastercard says this will ensure consumers’ cards are protected from fraudulent attempts.
Users won’t have to enter their password every time they try to pay, as Mastercard is introducing a key that replaces it.
It will also enable customers to make one-click payments using biometric authentication with fingerprints at checkout.
Cards stored via tokenization on merchant pages or in wallets can be automatically updated when replaced or updated, regardless of where they are stored.
Reduce fraud
Mastercard said that 100% tokenization of e-commerce websites will significantly reduce fraud rates.
According to market research firm Juniper Research, Losses caused by online payment fraud It is expected to exceed $91 billion by 2028 – with the global total exceeding $362 billion over the next five years.
Mastercard said that the adoption rate of tokenization is growing at a rate of 50% every year, and currently secures about 25% of the world’s e-commerce transactions through its network.
Mastercard said it is rolling out the change in Europe because the continent has long been a leader in payments innovation, such as contactless payments and online banking, which allows bank users to share account details to access new financial products.
Valerie Nowak, executive vice president of product and innovation for Mastercard Europe, said in a statement: “In Europe, we are seeing strong momentum for tokenization across the ecosystem, convenience and reduced fraud rates. Naturally.
“We believe realizing this vision by 2030 is a win-win-win for shoppers, retailers and card issuers.”
The future of payments
From the first appearance of credit cards in the 1950s and 1960s to the shift to online payments with widespread adoption of the internet in the early 2000s, the way we pay has gone through some pretty dramatic changes over the course of the decades.
In the early days of credit cards, bank clerks would check card numbers against invalid directories or call the issuing bank to verify that the person paying the card was who they said they were.
So-called “zip-zap” machines print card numbers on carbon paper packets and are the primary method of paying by credit card at the checkout counter.
Until the 1970s and 1980s, magnetic stripes and electronic payment terminals dominated.
Then came cards with microchips that could store information such as the card’s owner, number and expiry date.
Mastercard is betting that its shift to this new “embedded” payment system will be as dramatic as the move to chips and PINs or the adoption of contactless payments, which are currently taking place in advanced economies around the world. widely used in.
The company says its technology will make the experience of paying for items online as smooth as contactless payments in-store. It said this means consumers will be able to pay with one click on any device, including smartwatches, home assistants and even cars.
For example, Mastercard has a partnership with Mercedes-Benz that allows the carmaker’s customers to make digital payments at more than 3,600 service stations in Germany using fingerprint sensors in their cars.
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