E-commerce is poised for continued growth, with global retail sales expected to reach $6.8 trillion by 2028. To get a stronger view on just how important this sector is going to be I strongly advise a quick read of a McKinsey report I covered yesterday.
Tokenisation: a secure e-commerce
However, as the digital shopping ecosystem expands, so do fraud concerns.
By 2029, e-commerce fraud is projected to exceed $107 billion annually, highlighting the urgent need for robust payment security. Tokenisation, a technology that replaces sensitive card details with secure tokens, is emerging as a critical solution to balance security and efficiency at checkout.
The Rise of Network Tokenisation
A new study by Juniper Research predicts that global network tokenised transactions will double from 283 billion in 2025 to 574 billion in 2029.
This growth reflects merchants’ increasing adoption of network tokenisation as a safeguard against fraud.
By securing card information throughout the transaction lifecycle, tokenisation helps reduce vulnerabilities and improve consumer confidence in online shopping.
Visa’s stricter fraud thresholds, set to take effect in 2026, further underscore the necessity of fraud prevention measures like tokenisation. Merchants and payment processors who fail to comply may face additional fees.
Token Service Providers (TSPs) are responding by developing value-added tools, such as real-time fraud detection and transaction monitoring, to support merchants in reducing fraud.
Consumer Expectations at Checkout
Today’s consumers demand not only security but also convenience at checkout.
Studies reveal that cart abandonment rates exceed 70%, often due to issues like lack of trust, slow checkout processes or limited payment options.
Tokenisation addresses these concerns by streamlining the checkout experience and enhancing security.
Adyen’s EMEA president Alexa von Bismarck categorises consumer expectations into the “three C’s”: Context, Control and Convenience. She notes that tokenisation supports all three by enabling seamless, secure transactions with minimal friction.
Convenience and Long-Term Benefits
Tokenisation simplifies transactions by allowing users to authenticate securely without repeatedly entering card details.
This efficiency not only improves customer satisfaction but also reduces the likelihood of abandoned carts.
Mastercard, for instance, has observed a 3–6% increase in transaction approvals through tokenised payments, a significant gain for online merchants.
Additionally, tokenisation addresses common challenges like card expiry or loss.
With tokenised payments, customers no longer need to update card details for recurring transactions, reducing churn for subscription-based businesses.
Tokenisation in 2025 and Beyond
By the end of 2025, the majority of online transactions are expected to incorporate tokenisation in some form.
Mastercard’s Mark Barnett believes this adoption is driven by the tangible benefits of reduced fraud and higher approval rates, which are critical to merchants’ success.
As von Bismarck highlights, the momentum behind tokenisation is accelerating.
Merchants increasingly recognise the dual advantages of enhanced security and improved payment performance, positioning tokenisation as a cornerstone of e-commerce innovation.
In the battle against fraud, tokenisation is not just a technological upgrade – it’s a transformative step toward a safer, more efficient digital shopping ecosystem.
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