Mastercard to Replace Credit Card Numbers with Tokenization Technology

Mastercard is planning to phase out traditional credit card numbers in favor of tokenization technology as a means to enhance data security and minimize the risk of information leaks.

This development was highlighted by Singaporean publication Lianhe Zaobao, which detailed Mastercard’s proactive measures to tackle the increasing issue of online fraud.

Tokenization involves substituting sensitive information, such as credit card numbers, with randomly generated digital tokens. These tokens stand in for the original data during both storage and transmission, thereby greatly reducing the likelihood of data breaches.

Mastercard CEO Michael Miebach emphasized the company’s intention to broaden the application of this technology while also moving towards biometric authentication methods, like fingerprint or facial recognition, to replace traditional passwords.

This move is part of Mastercard’s broader strategy to mitigate the impact of online payment fraud, which is projected to cost the company over $91 billion by 2028.

The company initially introduced tokenization technology a decade ago, and while it took three years to achieve its first billion-dollar transaction using this method, Bloomberg reports that the same volume can now be processed in just one week.