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Tokenization Market Growing at a Healthy CAGR of 20.1% and Expected to Reach USD 7.79 billion by 2028

Santosh Sargar

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As per the report published by Fior Markets, the global Tokenization market is expected to grow from USD 1.8 billion in 2020 and to reach USD 7.79 billion by 2028, growing at a CAGR of 20.1% during the forecast period 2021-2028.

The Tokenization market is witnessing significant growth in the past years. This growth is attributed to rising data security issues and fraudulent financial transactions, an increase in banking applications and credit cardholders, including the usage of online payment technology, increasing the risk of cyber-attack, a wide range of applicability, and rising adoption for tokenization technology for better and secured processing.

Tokenization is a data security solution meant to prevent unwanted access to a company’s vital data and information. Tokenization safeguards all data in a transaction carried out by smartphone, tablet, or other similar devices. Tokenization in data security refers to the process of replacing sensitive information with a non-sensitive counterpart that has no exploitable value. The substitution is carried out with the help of a token, which is created by an algorithm. Tokenization substitutes similar non-sensitive data for sensitive data. A token is a non-sensitive piece of substitute information. Tokenization has been frequently used to safeguard vital sensitive information against fraud. Tokenization has gained popularity as a means for small and medium-sized enterprises to increase the security of credit card and e-commerce transactions while lowering the expense and complexity of complying with industry standards and government laws. Tokenization provides significant benefits such as security from hackers and thieves, decreased PCI scope, internet protection, and internal security.

The global Tokenization market is expected to witness significant growth, owing to the rising need to protect sensitive data and information from threat, greater emphasis on meeting consumer demand and improving customer experience, and increasing demand for cloud-based tokenization. The factors restraining the market growth are the end-users ambivalence towards encryption and tokenization and the lack of awareness and information on tokenization. Growing inclination towards contactless payments because of the effect of the COVID-19 epidemic, which can provide market growth opportunities.

Key players operating in the global Tokenization market include Visa, Fiserv, Mastercard, Micro Focus, Thales TCT, American Express, Ingenico Payments, TokenEx, HelpSystems, MeaWallet, CipherCloud, Futurex, nCipher, VeriFone, Bluefin Payment Systems, IntegraPay, AsiaPay, Paragon Payment Solutions, Liaison Technologies, and Marqeta. To gain a significant market share in the global Tokenization market, the key players are now focusing on adopting strategies such as product innovations, mergers & acquisitions, recent developments, joint ventures, collaborations, and partnerships. Mastercard and Visa are some of the key manufacturers operating in the Tokenization market.

  • In August 2020, Federal Bank selected Fiserv to support the launch of their first independent credit card.
  • In July 2020, the Bank of Baroda had collaborated with Fiserv for digital transformation.
  • In March 2020, Bypass Mobile was acquired by Fiserv.

To Know More, View the Sample Report

SMEs segment dominated the market and held the largest market share of 53.76% in the year 2020

Based on organization size, the global Tokenization market is segmented into SMEs and large enterprises. SMEs segment dominated the market and held the largest market share of 53.76% in the year 2020. This growth is attributed to the expanding application of tokenization solutions and services amongst SMEs to satisfy the regulatory requirements and decrease the risk of fraud.

API-Based segment dominated the market and held the largest market share of 58.4% in the year 2020

Based on the tokenization technique, the global Tokenization market is segmented into API-Based and Gateway-Based. API-Based segment dominated the market and held the largest market share of 58.4% in the year 2020. This growth is attributed to the substantial applicability in a variety of sectors.

Cloud segment dominated the market and held the largest market share of 63.5% in the year 2020

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Based on deployment type, the global Tokenization market is segmented into On-premises and Cloud. The cloud segment dominated the market and held the largest market share of 63.5% in the year 2020. This growth is attributed to the growing prerequisite for a cloud solution, the increasing rate of adoption by SMEs, and the reduction of costs associated with the software, hardware, storage, and technical personnel.

BFSI segment dominated the market and held the largest market share of 21.72% in the year 2020

Based on verticals, the global Tokenization market is segmented into BFSI, Healthcare, IT and ITES, Government, Retail and eCommerce, Energy and Utilities, and others. BFSI segment dominated the market and held the largest market share of 21.72% in the year 2020. This growth is attributed to the increasing number of cybercrime and the continuous requirement for new payment security solutions and services to protect the industry’s workers, customers, assets, branches, operations, and offices.

Solution segment dominated the market and held the largest market share of 59.2% in the year 2020

Based on components, the global Tokenization market is segmented into solutions and services. The solution segment dominated the market and held the largest market share of 59.2% in the year 2020. This growth is attributed to decreased risk of payment fraud and identity theft and increasing demand for tokenization solutions.

Payment Security segment dominated the market and held the largest market share of 37.4% in the year 2020

Based on application area, the global Tokenization market is segmented into Payment Security, User Authentication, and Compliance Management. The payment Security segment dominated the market and held the largest market share of 37.4% in the year 2020. This growth is attributed to the facility to contribute to the process of enhancing customer experience along with maintaining fraud prevention levels.

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