Tokenization Market to Reach $13.23 billion by 2030 - Market Size, Share, Forecasts, & Trends Analysis Report with COVID-19 Impact by Meticulous Research®

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Jan 23, 2023, 08:36 ET

REDDING, Calif., Jan. 23, 2023 /PRNewswire/ -- According to a new market research report titled, 'Tokenization Market by Offering (Solutions and Services), Application (Payment Security, User Authentication, Compliance Management), Organization Size, End-use Industry (Retail, Healthcare, BFSI, Others), and Geography - Global Forecast to 2030', the tokenization market is expected to reach $13.23 billion by 2030, at a CAGR of 19.7% from 2023 to 2030.

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Tokenization is the process of exchanging sensitive data such as PANs, PHI, and PII with some surrogate values or tokens. The token is a unique identifier that retains all the relevant information about the data without compromising its security. Tokenization helps improve enterprises' operational efficiency and enhances productivity.

The growth of this market is attributed to the proliferation of digital payment methods, stringent PCI DSS regulations, and increasing financial fraud in e-commerce. In addition, the growing inclination toward using payment applications across various industries is expected to offer significant opportunities for the growth of this market. However, tokenization implementation adds a layer of complexity to the IT structure, which restrains the growth of this market. Furthermore, the low awareness of online payments in rural areas challenges the market's growth. Additionally, the rising adoption of cloud-based tokenization solutions and services is a major market trend.

The proliferation of digital payment methods is expected to drive tokenization market growth

Digital payments were on the rise before COVID-19, but worldwide lockdowns catapulted a massive shift in consumer buying behavior and government policies & regulations and led to a rise in eCommerce. All these factors have driven the adoption of digital payments across various industries and created the need for measures to protect online payments. According to McKinsey & Company (U.S.), in October 2021, more than 82% of Americans used digital payments and demanded faster, easier, and safer payments. The rise of contactless payments poses several challenges, especially security. To safeguard against security breaches due to the high volume of contactless payments, business institutions such as retail, restaurants, and banking & insurance rely on tokenization as a security measure to replace sensitive information within a unique code called a token.

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As security breaches and threats have become more common in digital payments, businesses and consumers look for solutions to limit the exposure of risk and improve compliance obligations. Additionally, the decline in payment cards is increasing due to fraud and inaccurate or outdated information, resulting in loss of sales and poor customer experience. Thus, businesses are adopting network tokenization as one of the optimal payment solutions to overcome such barriers. Tokenization replaces the customer's primary account numbers (PANs) and other card details with a token and directly communicates with the issuing bank to verify the card's legitimacy, preventing card declines. According to Visa (U.S.), in November 2022, payment transactions using network tokens can reduce fraud by nearly 26% and have an average authorization rate increase of 2.2%. Thus, the rising adoption of different payment modes has accelerated the demand for tokenization solutions as secure payment processing facilitates the transfer of online payments, client data, and other sensitive information and protects against fraud and other security issues.

Based on offering, the tokenization market is segmented into solutions and services. In 2023, the solution segment is estimated to account for the largest share of the tokenization market. The large market share of this segment is attributed to the increasing ensure compliance with payment security guidelines and the growing need to ensure continuous customer experience and maintain fraud prevention levels due to increased financial crimes. Moreover, growing consumer interest in contactless payments and rising demand for cloud-based tokenization solutions are expected to offer lucrative opportunities for the market's growth. However, the services segment is expected to register the highest CAGR during the forecast period. The growth of this segment is attributed to the growing need for visibility among organizations for diagnosing and troubleshooting problems before they impact operations or end-user experiences.

Based on application, the tokenization market is segmented into payment security, user authentication, and compliance management. In 2023, the payment security segment is estimated to account for the largest share of the tokenization market. However, the user authentication segment is expected to register the highest CAGR during the forecast period due to enhanced payment security processes, the need to prevent unauthorized users from accessing a device or network, the rise in cyberattacks on fintech institutes, and the increasing need to protect user payment transaction data.

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Based on organization size, the tokenization market is segmented into large enterprises, and small and medium-sized enterprises. In 2023, the large enterprises segment is estimated to account for the largest share of the tokenization market. However, the small & medium-sized enterprises segment is expected to register the highest CAGR during the forecast period due to the rising adoption of payment security solutions among SMEs to modernize their businesses and provide customers with seamless & secure digital solutions.

Based on end-use industry, the tokenization market is segmented into BFSI, retail, travel & hospitality, healthcare, IT & telecom, media & entertainment, and other end-use industries. In 2023, the BFSI segment is estimated to accounte for the largest share of the tokenization market. This segment is projected to register the highest CAGR during the forecast period. The growth of this segment is attributed to increasing data breaches in the BFSI sector and the rising adoption of payment security solutions to prevent fraud.

Based on geography, the tokenization market is segmented into North America, Asia-Pacific, Europe, Latin America, and the Middle East & Africa. In 2023, North America is estimated to account for the largest share of the tokenization market. North America's major market share is attributed to the rising adoption of online payment modes for transactions. Furthermore, the presence of major market players that provide payment networks for online transactions drives the growth of this regional market.

Some of the key players operating in the tokenization market are Bluefin Payment Systems LLC (U.S.), Braintree (U.S.), Cybersource (U.S.), Elavon (U.S.), Ingenico (France), Broadcom, Inc. (U.S.), Thales Group (France), Shift4 Payments, LLC (U.S.), Signifyd (U.S.), TNS, Inc. (U.S.), Tokenex (U.S.), SISA Information Security Pvt. Ltd. (India), Stripe (U.S.), Geobridge Corporation (U.S.), MasterCard (U.S.), Verifone Systems Inc. (U.S.), Fiserv, Inc. (U.S.), Micro Focus (U.K.), and American Express (U.S.).

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Scope of the report:

Tokenization Market, by Offering

Solutions
Services

Integration Services
Support Services
Consulting Services

Tokenization Market, by Application

Payment Security
User Authentication
Compliance Management

Tokenization Market, by Organization Size

Large Enterprises
Small & Medium-sized Enterprises

Tokenization Market, by End-use Industry

BFSI
Retail
Travel & Hospitality
Healthcare
IT & Telecom
Media & Entertainment
Other End-use Industries

Tokenization Market, by Geography

North America

U.S.
Canada

Europe

U.K.
Germany
France
Italy
Spain
Sweden
Denmark
Rest of Europe

Asia-Pacific

Japan
China
India
Singapore
Malaysia
Indonesia
Rest of Asia-Pacific

Latin America

Brazil
Mexico
Rest of Latin America

Middle East & Africa

UAE
Israel
Rest of the Middle East & Africa

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Related Report:

Payment Security Market by Offering (Solution, Services), Platform (Web, PoS), Payment Mode (Cards, Digi Wallets, Internet Banking, PoS), Vertical (Retail, Travel, Healthcare, BFSI, IT & Telecom, Media), Organization Size, and Geography - Global Forecast to 2028

https://www.meticulousresearch.com/product/payment-security-market-5237

Digital Payment Market by Offering (Solution & Services), Payment Mode (Digital Wallets, Banking Cards, POS, Internet Banking), End User (BFSI, Retail, Travel & Hospitality, Healthcare, Others), Organization Size and Geography - Global Forecasts to 2029

https://www.meticulousresearch.com/product/digital-payment-market-5410

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