US Tokenization Market Size Likely to Surpass at a CAGR of 21.4% By 2033

As per the current market research conducted by the CMI Team, the US Tokenization Market size is expected to record a CAGR of 21.4% from 2024 to 2033. In 2024, the market size is projected to reach a valuation of USD 875.9 Million. By 2033, the valuation is anticipated to reach USD 5,016.8 Million.

US Tokenization Market: Growth Factors and Dynamics

• Rapid Digitization and E-commerce Growth: The surge in online transactions and e-commerce activities fuels the demand for tokenization solutions to secure sensitive payment data. Increased consumer reliance on digital payments and mobile wallets drives the adoption of tokenization to protect personal and financial information.

• Stringent Data Security Regulations: Compliance with regulations like PCI DSS and GDPR mandates robust data protection measures, including tokenization, to safeguard customer data. Organizations in the US prioritize data security and risk mitigation, leading to the widespread adoption of tokenization solutions to achieve compliance and avoid costly data breaches.

• Heightened Cybersecurity Threats: The growing sophistication of cyber threats and the rise in data breaches emphasize the need for advanced security measures like tokenization to prevent unauthorized access to sensitive information. Organizations invest in tokenization technologies to mitigate the risk of data theft, financial fraud, and reputational damage associated with cyberattacks.

• Increased Adoption of Cloud-based Solutions: The shift towards cloud computing drives the adoption of cloud-based tokenization solutions, offering scalability, flexibility, and cost-efficiency. Cloud-based tokenization platforms enable seamless integration with existing IT infrastructure and provide real-time data protection across multiple channels and devices.

• Expansion of Digital Payment Ecosystem: The proliferation of digital payment methods, including mobile payments, contactless transactions, and peer-to-peer transfers, drives the need for secure tokenization solutions. Payment service providers and fintech companies leverage tokenization to enhance the security and convenience of digital payment experiences, fostering consumer trust and adoption.

• Emergence of Tokenization in New Verticals: Beyond traditional sectors like banking and finance, tokenization finds applications in industries such as healthcare, retail, and transportation. Increased awareness of tokenization benefits, such as data privacy, regulatory compliance, and fraud prevention, drives its adoption across diverse verticals, expanding the scope of the US tokenization market.

• Demand for Contactless Payments: The COVID-19 pandemic has accelerated the adoption of contactless payment methods in the US. Tokenization technology plays a crucial role in securing contactless transactions by replacing sensitive card data with unique tokens, driving the growth of the tokenization market in the country.

US Tokenization Market: Partnership and Acquisitions

• In 2022, Mastercard acquired CipherTrace, a prominent cryptocurrency intelligence firm, to enhance its cybersecurity offerings. By integrating CipherTrace’s digital asset capabilities with Mastercard’s solutions, businesses gain improved transparency, empowering them to identify and mitigate risks associated with cryptocurrency transactions.

• In 2021, ExxonMobil teamed up with Fiserv to introduce touchless payment options at fuel pumps, leveraging Fiserv’s Carat ecosystem for seamless omni-channel commerce. By integrating with the Google Pay app, customers can make digital payments securely and conveniently, enhancing their overall payment experience.

Report Scope

US Tokenization Market: COVID-19 Analysis

The COVID-19 pandemic has significantly impacted the US Tokenization Market, with the industry experiencing both positive and negative effects. Here are some of the key impacts:

• Acceleration of Digital Transformation: The COVID-19 pandemic accelerated the shift towards digital payments and e-commerce, increasing the demand for tokenization solutions to secure online transactions. With more consumers relying on digital channels for purchases, businesses prioritize implementing tokenization to protect sensitive payment data and mitigate fraud risks.

• Disruption to Implementation Plans: Some organizations faced challenges in implementing tokenization projects due to disruptions caused by the pandemic, such as remote work arrangements and budget constraints. Delayed or postponed tokenization initiatives impacted market growth as businesses focused on addressing immediate operational challenges.

• Resumption of Business Initiatives: As economic activities resume post-pandemic, businesses prioritize completing tokenization projects and investing in cybersecurity measures to strengthen their defenses against cyber threats.

• Enhanced Security Measures: Organizations bolster security measures by adopting advanced tokenization technologies and implementing multi-layered security protocols to safeguard sensitive data.

• Focus on Regulatory Compliance: Companies prioritize compliance with data protection regulations and industry standards, such as PCI DSS and GDPR, by enhancing tokenization practices to meet evolving compliance requirements.

• Investment in Cloud-based Solutions: The adoption of cloud-based tokenization solutions increases as organizations seek scalable and cost-effective security solutions that offer flexibility and remote accessibility.

• Partnerships and Collaboration: Collaboration between tokenization providers, financial institutions, and regulatory bodies fosters innovation and the development of industry best practices, driving market recovery through collective efforts.

• Educational Initiatives and Training Programs: Educational initiatives and training programs are launched to increase awareness and understanding of tokenization technology among businesses and professionals. Training sessions and workshops on implementing and managing tokenization solutions equip organizations with the knowledge and skills needed to effectively leverage tokenization for data security and fraud prevention.

In conclusion, the COVID-19 pandemic has had a mixed impact on the US Tokenization Market, with some challenges and opportunities arising from the pandemic.

List of the prominent players in the US Tokenization Market:

• Gemalto N.V.
• First Data Corporation
• Thales Group
• CyberSource Corporation
• Symantec Corporation
• TokenEx, LLC
• Braintree (a PayPal Company)
• Bluefin Payment Systems LLC
• Fit Pay Inc.
• Shift4 Payments LLC
• SecurEnvoy Ltd.
• CIPHERCloud
• Protegrity USA Inc.
• Merchant Link LLC
• Vormetric Inc.
• Others

The US Tokenization Market is segmented as follows:

By Component

• Tokenization Software
• Tokenization Services

By Tokenization Technique

• API-based Tokenization
• Gateway-based Tokenization
• Hosted Tokenization
• Cloud-based Tokenization
• Others

By Deployment Mode

• On-premises
• Cloud-based

By Organization Size

• Small and Medium-sized Enterprises (SMEs)
• Large Enterprises

By Vertical

• Banking, Financial Services, and Insurance (BFSI)
• Retail and E-commerce
• Healthcare and Life Sciences
• Government and Public Sector
• IT and Telecommunications
• Transportation and Logistics
• Manufacturing
• Others