By 2030, Mastercard plans to eliminate the need for Europeans
to manually enter their card numbers during online transactions
regardless of the platform or device, CNBC reported. This shift towards
tokenization and biometric authentication aims to enhance both security and
convenience for users.

Supporting Online Transactions

The payment giant will phase out manual
card number entry in favor of a randomly generated “token” to enhance the way
users pay for online services. Tokens will replace the familiar 16-digit card
number, and the service will be available for all Mastercard cards issued in
Europe.

Valerie Nowak, the Executive Vice President of Product
and Innovation at Mastercard Europe, told CNBC: “In Europe, we have seen
tokenization gaining momentum across the ecosystem. The convenience and reduced
rates of fraud sell themselves. We are confident that reaching this vision by
2030 is a win-win-win for shoppers, retailers, and card issuers alike.”

The company has collaborated with banks, fintech
firms, merchants, and other partners to ensure a smooth transition. This
initiative seeks to simplify the checkout process and bolster security against
fraud. According to Mastercard, tokenization has been growing rapidly, securing
about 25% of all e-commerce transactions globally across its network.

With the introduction of passkeys, Mastercard users
will no longer need to remember and enter passwords for each transaction.
Biometric authentication, such as thumbprint verification, will enable
one-click payments at checkout. This technology will also ensure that card
details stored in merchants’ systems or electronic wallets are automatically
updated when cards are renewed or replaced.

Europe Leads the Way

Mastercard’s push towards 100% tokenization in
e-commerce targets to reduce fraud rates. By adopting tokenization, the
payments giant hopes to mitigate these losses and enhance transaction security.

Europe has a history of innovation in payments
technology. Europe has been at the forefront of adopting contactless payments
and online banking. Mastercard believes that the shift to tokenization will be
as significant as the adoption of chip and PIN or contactless payments.

The new token-based payment system promises to make
online shopping as smooth as in-store contactless payments. Consumers will be
able to use any device, from smartwatches to home assistants and even cars, to
make secure payments.

Recently, Mastercard extended its global Biometric Checkout Program to Uruguay. This initiative is in collaboration with Ingenico, Fulcrum Biometrics, Fujitsu Frontech, Scanntech, and Red Express. This project allows shoppers at Red Express to pay using their palms. Shoppers can register their payment information and biometrics at the point of sale.

This article was written by Jared Kirui at www.financemagnates.com.

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