Tokenised payments to exceed 1 trillion by 2026: Juniper

The total number of tokenised payment transactions will exceed 1 trillion globally by 2026, according to new research from Juniper.

This will be a jump from 680 billion in 2022.

The research, Payment Tokenisation: Key Opportunities, Segment Analysis & Market Forecasts 2022-2027 noted that this represents a growth of 58 percent over the next four years.

Juniper has attributed this growth to the rise of ‘one-click’ solutions, such as Click-to-Pay, that use card-on-file tokenisation to store a customer’s payment credentials; enabling them to auto-fill their checkout details and complete transactions via a single click.

Tokenisation protects customers’ payment credentials when stored; replacing sensitive data with token values that hold no intrinsic value. This prevents malicious actors from gaining access to payment data in the event of a data breach.

The new report predicts that online and mobile e-commerce-tokenised volume will grow by 74 percent by 2026. This growth is driven by the increasing customer expectation of a frictionless checkout experience, which one-click solutions via tokenisation offer.

Growth will also be driven by benefits, including time savings for the end user by eliminating the need for customers to re-enter payment credentials when shopping online.

The research also identified IoT payments as offering the largest growth amongst the tokenisation market over the next 5 years, with tokenised IoT transactions expected to reach 19 billion by 2027, growing 400 percent from just 3.8 billion in 2022.

Tokenisation is critical in facilitating IoT payments; enabling transactions to be made via new use cases and form factors, unlocking new revenue opportunities for payment providers.

Given tokenisation solutions’ long development cycle, tokenisation vendors, other than the already advanced card networks, must begin scaling their own IoT tokenisation solutions or risk missing this lucrative opportunity.

Juniper has also recently reported that online merchant losses will exceed $343 billion between 2023 and 2027.

Online payment fraud includes losses across the sales of digital goods, physical goods, money transfer transactions and banking, as well as purchases like airline ticketing. Fraudster attacks can include phishing, business email compromise and socially engineered fraud.