According to a new market research report titled,
‘Tokenization Market by Offering (Solutions, Services), Application (Payment
Security, User Authentication, Compliance Management), Vertical (BFSI, Retail,
Travel, Healthcare, Others), Organization Size, and Geography - Global Forecast
to 2029,’ the global tokenization market is expected to reach $14.3 billion by
2029, at a CAGR of 17.3% from 2022 to 2029.
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Tokenization refers to a process by which a piece of
sensitive data, such as a credit card number, is replaced by a surrogate value
known as a token. The sensitive data generally needs to be stored securely at
one centralized location for subsequent reference and requires strong
protective measures. The security of a tokenization approach depends on the
security of the sensitive values and the algorithm and process used to create
the surrogate value and map it back to the original value. Most businesses hold
at least some sensitive data within their systems, whether it be credit card
data, medical information, Social Security Numbers, or anything else that
requires security and protection. Using tokenization, organizations can
continue to use this data for business purposes without incurring the risk or
compliance scope of storing sensitive data internally.
Increased adoption of digital payment approaches, the need
to adhere to PCI DSS guidelines, and the rise in fraudulent activities in
e-commerce are the major factors driving the growth of this market. In
addition, the increasing use of payment apps across different industry
verticals is expected to offer prominent growth opportunities for the growth of
this market. However, the lack of trust in online banking is expected to
restrain the growth of this market.
The increased usage of digital transactions resulted in an
increase in cyber-attacks. In recent years, there has been a gradual increase
in payment fraud activities at organizations, as nearly 75% of organizations
were targets of a payment fraud attack in 2020 (Source: JP Morgan). Thus,
increasing payment-related frauds are expected to propel the growth of the
tokenization market in the coming years.
The tokenization market is segmented based on Offering
(Solutions, Services), Application (Payment Security, User Authentication,
Compliance Management), Vertical (BFSI, Retail, Travel, Healthcare, Others),
Organization Size, and Geography. The study also evaluates industry competitors
and analyses the market at the regional and country levels.
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Based on offering, in 2022, the solutions segment is
expected to account for the largest share of the tokenization market and is
slated to register the highest CAGR during the forecast period. The rising
demand for advanced payment security solutions for digital e-commerce and the
increasing use of payment applications across different industry verticals is
driving the growth of this segment. Furthermore, tokenization solutions have
gained popularity as it enables organizations to adhere to the PCI DSS regulatory
compliances. In addition, the growing number of data breaches and financial
losses associated contribute to the growth of the tokenization solutions
market.
Based on application, in 2022, the payment security segment
is expected to account for the largest share of the tokenization market. The
growth of this segment is driven by factors such as the increasing need to stay
compliant with payment security guidelines and the growing need to ensure
continuous customer experience and prevent fraudulent activities. Furthermore,
growing consumers’ interest in contactless payments and the rising demand for
cloud-based tokenization solutions and services are expected to provide
lucrative opportunities for the growth of this segment. However, the user
authentication segment is slated to register the highest CAGR during the
forecast period. The growth of this segment is driven by factors such as rising
incidents of security breaches and sophisticated cyberattacks leading to
financial and reputational loss, stringent government regulations to increase
the adoption of authentication solutions, and the rising instances of identity
theft and fraud.
Based on industry vertical, in 2022, the BFSI segment is
expected to account for the largest share of the tokenization market. The
growth of this segment is attributed to the rising implementation of regulatory
security compliance, rising demand for cloud-based security solutions, and the
increasing risk of cyber threats against BFSI infrastructure. However, the
retail segment is slated to register the highest CAGR during the forecast
period. The increase in smartphone usage, the rise of e-commerce channels, and
the rising incidents of online payment fraud are expected to drive the growth
of this segment.
Based on organization size, in 2022, the large enterprise
segment is expected to account for the largest share of the tokenization
market. This segment is also slated to register the highest CAGR during the
forecast period. Increasing transactions of high valuations in large
enterprises are compelling them to opt for tokenization solutions.
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Based on geography, in 2022, North America is expected to
account for the largest share of the tokenization market. The rising consumer
shift towards online payment modes is driving the market growth in this region.
North America’s strong financial position enables it to invest heavily in
advanced solutions and technologies, which has provided the organizations in
this region a competitive edge in the market.
The report also includes an extensive assessment of the key
growth strategies adopted by the leading market participants between 2019 and
2022. The tokenization market is consolidated and dominated by a few major
players, namely 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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