Mastercard is intensifying its initiatives to eradicate the reliance on credit card numbers during online transactions to combat fraud. With a decade passed since the introduction of a technology that substitutes customers’ card numbers with tokens, Mastercard now handles one billion such transactions weekly, revealed by CEO Michael Mie Bach. This milestone comes after three years of processing the initial billion transactions.
The company’s vision includes broadening the utilization of this technology to supplant security protocols like passwords with biometric data such as fingerprints or facial scans, as explained by Mie Bach. This strategic move aligns with the financial sector’s collective effort to address the escalating concern of online payment fraud, projected to exceed $91 billion by 2028.
Around a decade ago, Mastercard and its competitor Visa pioneered token technology in response to fraudulent activities targeting retailers’ payment systems. Initially designed to replace card numbers with unlockable tokens accessible only by authorized networks, the technology has evolved. Presently, malefactors are turning their focus towards e-commerce platforms that necessitate manual input of card details by consumers.
Notably, hackers are increasingly targeting websites in various regions, including India, where one-time passwords (OTPs) are relied upon for security. Mie Bach highlighted the vulnerability of OTPs to fraudsters. To address this, Mastercard is collaborating with global banks and payment service providers to substitute OTPs with biometric-based tokens derived from consumers’ unique physiological data. This initiative was recently launched in India through partnerships with PayU and banks.
Mie Bach emphasized the critical need for data protection, stressing that data breaches and fraud pose significant risks to the digital economy. Tokenization emerges as a pivotal tool to mitigate these challenges effectively.
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