The global tokenization market size is projected to reach $12,684.2 million by 2030, advancing at a CAGR of 19.3% during 2021–2030. This can be ascribed to the rising financial fraud and the increasing need to secure payment gateways.
Globally, the APAC market is projected to witness the fastest growth in the coming years, propelling at a CAGR of over 20%. The growth of the market can be attributed to the presence of key economies, such as India, Australia, China, South Korea, and Japan, which are rapidly deploying tokenization solutions. The presence of major IT & telecom companies, predominantly in developing economies of the region, is also likely to boost the demand for tokenization solutions.
Japan and China are the major markets for tokenization in the region, due to their technologically advanced capabilities in smartphones and the development of digital payment methods, specifically in the e-commerce sector in these countries, which, in turn, boost the demand for secure payment gateways for online transactions. Moreover, the increasing trend of online shopping is expected to drive the adoption of tokenization solutions by retailers during the forecast period in APAC.
Retail & e-commerce is the fastest-growing category in the market, based on the end-use segment. Tokenization allows retailers to efficiently transfer the burden of securing sensitive data and compliance to providers of tokenization solutions. Thus, allowing them to save time and resources by maintaining a secured database containing sensitive information about their customers and focusing on their core competencies of businesses, i.e., marketing and selling their products. Tokenization also helps retailers fulfill credit card data security and compliance, and provides enhanced end-to-end security. Thus, reducing the scope of data breaches.
Moreover, the healthcare category is expected to witness significant growth in the tokenization market outlook during the forecast period. As per the guidelines of the Payment Card Industry Data Security Standard and the Health Insurance Portability and Accountability Act, all healthcare organizations must abide by strict regulations for digital payments and security features. To facilitate attaining compliance with such requirements, tokenization solutions help abide by them and also improve the security posture of the organizations. Tokenization further allows to safely store consumer payment methods and automates the collection of consumer payments, enabling providers to streamline the consumer payment experience and simultaneously attain payment assurance.
Additionally, the BFSI category is expected to grow significantly, owing to the surging demand for convenient and secure digital payments. Moreover, tokenization solutions help provide diverse payment offerings and are not just limited to card payments, while ensuring security and safeguarding the transactions in any environment of commerce or money movement in the BFSI sector.
Players in the industry have been involved in partnerships and collaborations to remain competitive. For instance, in November 2020, ExxonMobil entered into a strategic partnership with Fiserv. Through this partnership, Fiserv plans to enable ExxonMobil to facilitate an omnichannel commerce experience. By providing the Carat ecosystem, ExxonMobil securely provides limitless payment opportunities across several channels and devices via the Google Pay app.
Moreover, in June 2020, Visa entered into a partnership with Facebook to introduce payments on WhatsApp, using Visa Direct, Visa’s real-time push payments technology, which would allow customers to make secure payments on WhatsApp.
Major players operating in the tokenization market include Fiserv Inc., Visa Inc., Mastercard International Incorporated, Micro Focus LLC, American Express Company, THALES, and Fidelity National Information Services Inc.