A new report from Juniper Research finds that annual revenues from tokenisation in mobile payments, where account details are replaced with data useless to fraudsters, will exceed $40 billion by 2024, growing from an estimated $17 billion in 2019.
Of this, more than $30 billion will be through remote eCommerce, rather than contactless payments at the point of sale.
Standards to Drive up Remote Tokenisation
The new research, Mobile Payment Data Security: Tokenisation, Encryption & Regulation 2020-2024, finds that the ability to use standard tokens and multifactor authentication protocols through Secure Remote Commerce will increase the use of such security measures in browser-based commerce, whereas previously it was mostly limited to native apps.
The report notes that this will be aided by 3D Secure 2.0 standards, which become mandatory for most payment networks worldwide. As a result Juniper Research believes virtually all remote payments will be tokenised by 2024, along with all Near Field Communication-based payments.
The only places that will be exempt from this is emerging economies where local players do not necessarily adhere to EMVCo specifications.
Secure Future in the Cloud and on Devices
The report shows over 33% of tokens used for mobile payments will be persistent by 2024, thanks to universal card-on-file tokenisation systems that allow merchants to securely store payment credentials, as well as some smartphone vendors providing persistent NFC tokens.
Juniper Research expects the use of persistent tokens to decline for contactless payments as solutions leveraging single-use tokens gain market share. However, the report also shows the wider merchant ecosystem for remote payments will keep persistent tokens in common usage over the next 5 years.
“Mobile payment involves a wide ecosystem of platforms, networks and devices,” says research author James Moar. “Many of these devices will not have sufficient hardware capacity to have strong on-device security, meaning cloud-based tokens will be necessary to ensure adequate security.”
Juniper Research provides research and analytical services to the global hi-tech communications sector; providing consultancy, analyst reports and industry commentary.
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