A new study from Juniper Research has found revenue from tokenization provisioning and management in mobile payments will exceed $53 billion in 2025, from $18 billion in 2020. The report found tokenization, where account details are replaced with data useless to fraudsters, is taking hold in both in-store and remote commerce.
This strong growth, of over 180%, will be fueled by increased use of OEM Pays in both in-store and remote commerce, as well as increasing adoption of tokenization by digital wallet providers and their tighter integration into app checkout processes.
The research recommends that digital wallet providers move to implement tokenization immediately, if not already, and prioritise acceptance to increase security in checkout processes.
Remote Commerce to Account for Majority of Tokenization Revenue, but Contactless Catching Up
The new research, Mobile Payment Data Protection: Tokenization, Encryption & Market Forecasts 2021-2025, found that revenue from remote payment tokenization will equate to 58% of total mobile payment tokenization revenue in 2025. However, this compares with 84% in 2020. As mobile contactless payments are tokenized by default, accompanying tokenization revenue is accelerating rapidly, with contactless enjoying boosted growth following the pandemic.
“Tokenization is quickly becoming ubiquitous for mobile payments; reflecting the need for mobile payments to offer superior security features. Tokenization vendors must offer simple and compliant token provisioning and management solutions, in order to capitalize on the rapid growth in mobile payments usage.”Susan Morrow, Research Co-Author
Persistent Tokens Gaining Ground in Remote Payments
The research also found that the use of persistent tokens is increasing in remote payments; accounting for 52% of tokenized remote mobile payment transactions in 2025, from 41% in 2020. The report identified that the increasing dominance of digital wallets that use persistent tokens in eCommerce is driving this growth. As such, the report recommends that tokenization vendors focus on token management systems to ensure that managing persistent tokens is as efficient as possible.
Juniper Research provides research and analytical services to the global hi-tech communications sector; providing consultancy, analyst reports and industry commentary.