In the coming years, the way we pay for products and services online will undergo major transformations. Starting in 2030, Mastercard will eliminate manual card number entry for online purchases in Europe.

In an interview with CNBC, the company announced that all cards issued on its network in Europe will be tokenized by the end of the decade. This means that instead of the traditional 16-digit card number used in transactions, a random “token” will be generated for each payment.

To make this transition possible, Mastercard is working with banks and merchants to replace manual entry in e-commerce with one-click payments, introducing tokenization as a new way to complete online transactions.

Tokenization: Increased security and reduced fraud

The company highlights that this change will bring greater security to consumers, significantly reducing the risk of fraud. With full tokenization of online transactions, fraud in the sector is expected to drop drastically.

Juniper Research estimates that online payment fraud will exceed $91 billion by 2028, totaling $362 billion over five years. Mastercard reports that tokenization is growing at a rate of 50% per year and already protects around 25% of e-commerce transactions conducted on its network.

This innovation will also allow consumers to make payments more quickly, using biometrics such as fingerprints for authentication. Additionally, cards stored in digital wallets or on merchant websites will be automatically updated whenever they are renewed or replaced.

The evolution of payments

Mastercard has decided to implement this change in Europe due to the continent’s leading role in financial innovations, such as contactless payments and online banking services. Valerie Nowak, Executive Vice President of Products and Innovation at Mastercard Europe, states that tokenization is already seeing significant adoption and that the combination of convenience and security makes the solution practically sell itself.

Mastercard believes that this evolution in online payments will be as revolutionary as the adoption of chip-and-PIN technology or the rise of contactless payments. The expectation is that, with this technology in place, online shopping will become as seamless as a contactless payment in a physical store.

Integrated payments and the future of transactions

The new technology will enable one-click payments on any device, including smartwatches, virtual assistants, and even cars. One example is the partnership between Mastercard and Mercedes-Benz, which allows the automaker’s customers to use fingerprint sensors in their vehicles to make digital payments at more than 3,600 gas stations in Germany.

With this innovation, Mastercard aims to make online payments more secure, efficient, and seamlessly integrated into everyday life.

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Source: Article published by CNBC. Read the original article here.