Annual revenues from tokenised 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, a new report Juniper Research found. Of this, over $30 billion will be through remote ecommerce, rather than contactless payments at the point of sale.
The new research, Mobile Payment Data Security: Tokenisation, Encryption & Regulation 2020-2024, found 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.
The report shows over 33 per cent 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,” said 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.”