Mastercard to Enhance Security with Tokenization Technology, Phasing Out Credit Card Numbers

Mastercard is set to replace credit card numbers with tokenization technology to combat online fraud. This move is part of a broader strategy to enhance security, alongside adopting biometric authentication methods.

Mastercard is taking a significant step towards enhancing online payment security by replacing traditional credit card numbers with tokenization technology. This initiative, detailed by Singaporean publication Lianhe Zaobao, is part of Mastercard’s proactive measures to tackle the growing issue of online fraud.

Tokenization: A New Security Standard

Tokenization involves replacing sensitive information, such as credit card numbers, with randomly generated digital tokens. These tokens stand in for the original data during storage and transmission, greatly reducing the risk of data breaches. By using tokenization, Mastercard aims to provide a safer transaction environment for both merchants and consumers.

Mastercard CEO Michael Miebach emphasized the company’s commitment to expanding the use of tokenization technology. Additionally, Mastercard is moving towards adopting biometric authentication methods, such as fingerprint or facial recognition, to replace traditional passwords. This shift represents a broader strategy to mitigate the impact of online payment fraud, which is projected to cost the company over $91 billion by 2028.

The Evolution of Tokenization at Mastercard

Mastercard first introduced tokenization technology a decade ago, and its adoption has grown significantly since then. While it took three years for the company to reach its first billion-dollar transaction using tokenization, Bloomberg reports that Mastercard now processes the same volume in just one week. This rapid growth highlights the effectiveness and increasing importance of tokenization in today’s digital economy.

Mastercard’s focus on enhancing security through tokenization and biometric authentication is expected to set a new standard in the payment industry, offering consumers greater protection against online fraud.

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Payment Security Innovation

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