Mastercard continues to expand its efforts to eliminate the use of credit card numbers during online purchases, aiming to decrease fraud levels on the Internet. The company has successfully replaced card numbers with tokens to protect customer data.
Mastercard CEO Michael Mibakh reported that the company now processes 1 billion transactions using tokens every week. To put this into perspective, it took three years to reach the first billion such transactions.
MasterCard is now planning to introduce new technologies to replace traditional security measures, like passwords, with biometric data such as fingerprints or fingertips. This move is part of the ongoing effort to combat the increasing threats of online fraud, estimated to surpass $91 billion by 2028 according to analysts.
Mastercard’s Gander highlighted that data and transaction protection used to heavily rely on passwords. However, as this method became more vulnerable over time, new solutions had to be sought.
Ten years ago, MasterCard and Visa first introduced tokenization technology as a response to scammers stealing credit card information from retailers like Target Corp. and Best Buy Co. The technology aimed to replace card numbers with tokens that could only be accessed by payment networks, rendering them useless to hackers.
Although this system proved effective in reducing fraud levels in physical stores, scammers have now shifted their focus to online stores where customers manually enter their card details.
Furthermore, scammers are increasingly targeting websites that use disposable passwords for added security. These passwords, sent by retailers and banks to confirm customer identities, are becoming more vulnerable, as noted by Michael Mibakh.
MasterCard intends to collaborate with banks and payment services globally to replace disposable passwords with tokens based on user biometric information. In India, the company has already partnered with Payu and banks like Axis Bank Ltd to implement this service.
Mibach emphasized that the issue arises when leaks occur, as scammers can exploit them for their benefit. Tokenization aims to significantly reduce the risks of leaks and fraud in the digital economy. MasterCard aims to transition all online transactions in Europe to a tokenization system by the end of the decade.