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LONDON – The experience of paying for products and services online is likely to look a lot different in the coming years.
Starting from 2030, Master Card will no longer require Europeans to manually enter their card number when paying online – no matter what platform or device they are using.
Mastercard will announce Tuesday in a lively chat with CNBC that, by 2030, all cards it issues on its network in Europe will be encrypted.
In other words, instead of the 16-digit card number we are used to using for transactions, this card number will be replaced by a randomly generated “token”.
The company said it is working with banks, fintech companies, merchants and other partners to phase out manual card entry for e-commerce by 2030 in Europe, moving to Use one-click button on all online platforms.
This will ensure that consumers’ cards are safe from fraud attempts, Mastercard said.
Users won’t have to constantly enter their password every time they try to make a payment as Mastercard is introducing a passcode instead of passwords.
It will also allow customers to make one-click payments at checkout using biometric fingerprint authentication.
Cards stored in the merchant’s site or e-wallet via tokens can be automatically updated wherever they are stored when they are replaced or renewed.
Reduce fraud
Mastercard says 100% encryption on e-commerce sites will significantly reduce fraud rates.
According to market research firm Juniper Research, losses due to online payment fraud is expected to exceed $91 billion by 2028 – a total of more than $362 billion globally over the next five years.
Mastercard said the token’s adoption has grown at a rate of 50% annually and now secures about 25% of all e-commerce transactions globally on its network.
Mastercard said it is rolling out the change in Europe as the continent has long been a leader in payments innovation, such as contactless payments and online banking, which allows users to share banking their account data to access new financial products.
Valerie Nowak, executive vice president, product and innovation at Mastercard Europe, said in a statement: “In Europe, we have seen the growth of tokenization across the ecosystem , convenience and fraud rates are reduced.”
“We believe that achieving this vision by 2030 is a win-win for shoppers, retailers and card issuers alike.”
The future of payments
From the first appearance of credit cards in the 1950s and 1960s, to the move to paying for everything online with the widespread adoption of the Internet in the early 2000s, the way we pay has changed. undergone some pretty significant changes over time. decades.
In the early days when credit cards were first introduced, bank staff would check card numbers against invalid numbers or call the issuing bank to check that the person making the payment was the same person. whom they declare or not.
So-called “zip-zap” machines that print card numbers onto carbon paper packets are the main way to pay via credit card at the checkout counter.
That was until the 1970s and 1980s, when magnetic stripes and electronic payment devices took over.
They are followed by cards with microchips that store data about the cardholder, card number and expiration date.
Mastercard is betting that the move to this new “embedded” payment system will be as significant a change as the move to chip and PIN, or the adoption of contactless payments, currently in use. widely used in developed economies around the world.
The company says its technology will make the experience of paying for items online as seamless as in-store contactless payments. It says that means consumers will be able to make payments with just one click on any device including smart watches, home assistant devices and even cars.
For example, Mastercard has a partnership with Mercedes-Benz to allow the automaker’s customers to use fingerprint sensors in their cars to make digital payments at more than 3,600 service stations across Germany.
