Mastercard: New Use Cases Prep for ‘Total’ eCommerce Tokenization by 2030

Credit cards have long been a catnip for criminals. The lure is undeniable.

“Your account number is valuable — it has personal information that if someone gets a hold of, that’s how fraudsters compromise accounts and steal your money,” Pablo Fourez, chief digital officer at Mastercard, told PYMNTS in a recent interview.

Through the past decade, tokenization has been delivering on its promise of streamlining digital and mobile payments, reducing fraud and enabling seamless and secure transactions across various platforms. As Fourez noted to PYMNTS, the concept is simple, as the account number is replaced with another string of numbers — disposable and unique, created by cryptographic technology that associates each transaction with a one-time code that is useless to would-be fraudsters.

Last month, the payments network said that it would look to phase out the need to enter card numbers, static passwords and one-time codes when making online purchases by 2030 — with all transactions tokenized, for example, in Europe by that year. At present, the Mastercard Digital Enablement Service (MDES) tokenizes more than 30% of Mastercard transactions worldwide (India is one market Mastercard is working in which is on its way to 100% tokenization).

Universal Appeal

“Tokenization has transformed user experiences for millions of people, and how they pay every day, in ways that would have been unimaginable 10 years ago,” said Fourez. He noted the rise of tokenization has been especially visible in the transit industry, where one can tap a device to a ticket machine to buy their fares; in traditional retail, in-store commerce has seen a seismic shift in embracing the technology (which Mastercard made backward compatible with existing terminals.

“We make it work for all of the participants,” said Fourez, “and beyond. Every participant in the [commerce] value chain gets transparency into the fact that this a more secure transaction.” The merchants benefit, as do the payment service providers and acquirers that are processing the transactions. In addition, tokenized payments have more data attached to them so that payment networks, including Mastercard, can detect fraud more rapidly.

Asked by PYMNTS about how tokenization will see further adoption, tied to new use cases that are developing now and lie over the horizon, Fourez said that while tokenization first started with mobile payments and expanded to wearables. The company recently announced passkeys, which allow users to authenticate purchases using fingerprints and other biometrics.

New Use Cases

“As we move into other use cases, we’ll have to continue to work to make sure that it’s done in ways that are simple to be adopted by both merchants and consumers,” said Fourez, who added that “when we started on the tokenization journey, we had the view that every device could become commerce device.” That’s apparent in pacts such as the one Mastercard has with Mercedes-Benz and other car manufacturers, which enable payments to be made with the car as the ultimate device. Against that backdrop, payments at the pump (for gas, parking or charging electric vehicles) are simplified and seamless.

“You get charged, automatically, for what you have to pay,” Fourez said.

There’s also significant potential for commercial payments to be tokenized, said Fourez, who added that the company’s multi-token network can help automate payments tied to delivery of goods or services, even if those activities happen in stages.

“This increases transparency across the [B2B] ecosystem,” said Fourez, “and between suppliers and buyers … it’s a force multiplier for commerce.”

As he observed to PYMNTS, “tokenization is pervasive around how we make payments more secure — and it’s technology that you don’t see, but experience.”