The online buying experience may entirely change by 2030 as Mastercard plans to eliminate manual card entry and one-time checkout passwords. The payments network giant plans to rely on biometric authentication (like fingerprint or face recognition) with tokenization for seamless and secure purchasing online – accessible from any platform.
With this move, Mastercard is trying to protect sensitive data through tokenization and advanced encryption through Mastercard Digital Enablement Service (MDES). This enablement service is already tokenizing 30% of the transactions worldwide, with some countries like India nearing 100%.
Customer satisfaction will also be enhanced, given around two-thirds of the shoppers feel frustrated with manual card entry during checkout.
Key Takeaways
- Eliminating Manual Card Entry by 2030: Mastercard will phase out manual card entry and passwords. It will transition to biometric authentication and tokenization for better security and efficiency, particularly for online transactions.
- Widespread Adoption of Tokenization: Over 30% of Mastercard transactions today are tokenized globally. In some countries, like India, the numbers are closing for full adoption.
- Enhanced User Experience and Reduced Cart Abandonment: 25% of sales result in abandoned carts due to frustrating checkout process – biometric authentication will simplify the checkout. Customers will no longer be required to enter their cards manually and use complex passwords.
- Focus on Fraud Prevention and Cybersecurity: Numberless cards and biometric verification will significantly reduce online fraud.
Mastercard Targets Enhanced Online Security and Simplified Transactions by Phasing Out Passwords and Manual Card Entry
Source: MasterCard
Mastercard has announced plans to eliminate manual card entry and passwords for online transactions by 2030. This will enhance security and streamline the payment process. The payment industry has undergone significant transformations, from physical card swipes to contactless payments. Mastercard’s latest initiative seeks to further this evolution by removing the need for manual card details and passwords during online purchases.
Jorn Lambert, Chief Product Officer at Mastercard, stated that the company is progressing from traditional swiping and manually entering information to a new system where payments can be completed with fewer clicks and enhanced security. This development includes using advanced encryption and tokenization technologies to safeguard sensitive data.
Introduced a decade ago, tokenization replaces sensitive card information with unique digital identifiers or tokens. This method ensures that actual card details are not transmitted during transactions, reducing the risk of fraud. Currently, as mentioned, over 30% of Mastercard transactions globally utilize tokenization, with markets like India nearing full adoption for e-commerce.
Simultaneously, the company is expanding its global payment passkey service, which allows millions of users to authenticate transactions securely through biometrics, such as fingerprints or facial recognition, to verify online transactions. This will result in a secure, user-friendly alternative to traditional passwords and one-time codes.
Lambert added that this approach is transforming the use of physical cards. Cards without visible numbers will become standard, significantly decreasing the risk of fraud if lost or stolen.
Online fraud rates are significantly higher than in-store fraud, often due to exposed card numbers. By implementing tokenization and biometric authentication, Mastercard aims to reduce these fraud rates and enhance consumer confidence in online shopping.
The move towards eliminating manual card entry and passwords will simplify the online shopping experience. With biometric authentication, consumers can complete purchases swiftly without remembering complex passwords or entering lengthy card details.
The initiative also paves the way for numberless physical cards that display no card numbers, expiration dates, or security codes. This design minimizes the risk of fraud if a card is lost or stolen, as the sensitive information is stored securely elsewhere. The theft of physical cards also becomes less effective as they require biometric authentication.
Additionally, according to research by Mastercard, nearly two-thirds of shoppers find it difficult to manually enter their card details, which results in 25% of shopping carts being abandoned due to the complexity or slowness of the checkout process.
Mastercard’s technology is enhancing the efficiency of online checkouts for businesses. Currently, tokenization is reducing cart abandonment and increasing transaction approvals by 3 to 6 percentage points across various regions, contributing to an additional $2 billion in monthly global sales for merchants. Plus, it significantly lowers the risk of fraud. These improvements benefit a broad range of participants in the ecosystem, including banks, consumers, and businesses.
Lambert emphasized that as payments become more integrated into various commerce experiences, Mastercard fosters a global economy that benefits everyone. This includes providing consumers more control and convenience, boosting merchant sales, and reducing fraud for card issuers.
Mastercard collaborates with banks, fintech companies, and merchants to deploy these technologies. Services like Click to Pay and the Mastercard Payment Passkey are being introduced to facilitate this transition, aiming for a consistent and secure online checkout experience across various platforms.
Click to Pay is quickly growing, with issuers such as ING Spain, Commonwealth Bank of Australia, Santander Mexico, and NatWest incorporating it into their card offerings. Additionally, acquirers, payment service providers, and channel partners like Prestashop, Adyen, Yuno and Worldline are adopting this technology. Consumers use Click to Pay for daily transactions at global retailers such as Eat Takeaway.com, Arcos Dorados, Pizza Hut, and Nando’s.
Whereas Mastercard Payment Passkey was initially launched for millions of consumers in Singapore, the United Arab Emirates, and India, the technology is now expanding worldwide. Prominent banks, payment aggregators, and online merchants are implementing this technology.
Mastercard is intensifying its focus on cybersecurity beyond online transactions. In September, the company purchased the Boston-based cybersecurity firm Recorded Future for $2.65 billion. This acquisition enhances the use of artificial intelligence-driven tools that notify banks of potential compromises to credit and debit cards.
These developments are in response to increasing concerns from consumers and businesses alike. A survey by Experian showed that 84% of consumers are worried about identity theft, while 71% of businesses are concerned about cybercriminals employing AI to commit fraud. Mastercard’s efforts are designed to address these fears by offering advanced solutions emphasizing security and ease of use.
Mastercard is dedicated to safeguarding consumers and transforming the online shopping experience as the payments industry changes. By 2030, manual card entry might become obsolete, giving way to more secure and efficient payment technologies.
About Mastercard
Mastercard Incorporated is a technology company in the U.S. and globally, specializing in transaction processing and payment-related products and services. The company offers a range of integrated products and value-added services to a diverse clientele, including account holders, merchants, financial institutions, businesses, and governments. These services include credit programs allowing consumers to defer payments, various access to fund solutions through debit, credit, and prepaid accounts, and specialized commercial payment products. Mastercard also delivers platforms for optimizing payment processes and managing corporate expenditures, such as dynamically generated Virtual Card Numbers and treasury intelligence platforms that provide strategic financial recommendations.
Further, Mastercard provides several innovative solutions designed to facilitate secure and efficient money transfers across different mediums. This includes Mastercard Send, which integrates with digital platforms to allow in-app transfers, and Mastercard Cross-Border Services, which supports a variety of global payment flows through an extensive distribution network. Additionally, the company offers cyber and intelligence solutions, consulting, loyalty programs, and e-commerce payment gateway solutions under the MasterCard, Maestro, and Cirrus brands. Founded in 1966, the company is headquartered in Purchase, New York.
Conclusion
Mastercard’s initiative to phase out manual card entry and passwords by 2030 marks a significant evolution in the payments industry. By leveraging tokenization, biometric authentication, and advanced cybersecurity measures, the company aims to enhance transaction security while simplifying the checkout process for consumers.
These innovations not only address growing concerns about online fraud but also improve user experience by reducing cart abandonment and streamlining purchases. As Mastercard continues to collaborate with financial institutions, merchants, and technology providers, its efforts are shaping a safer, more efficient future for digital commerce.
