The tokenization market has exhibited exponential growth, soaring from $2.8 billion in 2023 to $3.45 billion in 2024, at a compound annual growth rate (CAGR) of 23.2%. This growth is attributed to the rise of mobile payments, e-commerce expansion, data breaches, digital transformation, fraud prevention, and consumer privacy concerns. The market is projected to reach $8.32 billion by 2028, reflecting a CAGR of 24.6%. Future growth is driven by cross-border payments, increasing prevalence of mobile and contactless payments, healthcare data security, supply chain security, and the rise of decentralized finance. Key trends include blockchain integration, tokenization of physical assets, NFTs, AI and machine learning integration, and tokenization as a service (TaaS).
Major Driver In The Tokenization Market
The tokenization market is poised for growth due to the increasing adoption of digital and contactless payments, creating a demand for enhanced payment security. Tokenization, a method of protecting sensitive data by replacing it with a non-significant value, offers heightened security for digital transactions. The use of card tokenization is considered more secure than encryption, providing robust protection against cyber threats. According to Indian government data in February 2023, digital transactions grew by nearly 90% from 232,000 to over 430,000 in the three years between FY19 and FY21. The growing trend of digital transitions and payments is expected to drive the tokenization market. The market sizes for 2023, 2024, and 2028 are instrumental in understanding the market's evolution.
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Tokenization Market Competitive Landscape
American Express Company, Visa Inc., Mastercard Inc., Fiserv Inc., Symantec Corporation, Entrust Corporation, Thales Defense & Security Inc., Sygnum Bank AG, Bluefin Payment Systems LLC, AsiaPay Limited, Futurex Industries Pvt Ltd., TokenEx Inc., Unicsoft Inc., TokenSoft Inc., MeaWallet AS, Inveniam Capital Partners Inc., Smart Token Labs, Apex India Pvt Ltd., Mt Pelerin AG, Blockchain App Factory, Token Minds Co, Boosty Labs, K20 Fund LLC, Securitize Inc., DigiShares ApS, Stably Inc., CipherCloud Inc., Hst Global Services Private Limited, Intelliblock Technologies Private Limited, Structure
Key Tokenization Market Trend
Major companies operating in the tokenization market are undergoing strategic collaborations to sustain in tokenization services market. Strategic collaborations drive innovation, expand capabilities, and create synergies in the tokenization market by leveraging diverse expertise, resources, and technologies. For instance, in August 2022, Skyflow, a US-based data privacy vault company, Deepens Collaboration with Visa Inc., a US-based Credit card service corporation, to Make Network Tokenization the Secure Payments Standard. The collaboration streamlines the implementation of network tokenization, ensuring simplicity and security, and aligns with Skyflow's commitment to enhancing the overall security of the payment’s ecosystem. Utilizing Token ID, a Visa Solution, Skyflow facilitates network tokenization adoption for merchants, payment facilitators, and gateways, offering benefits such as fraud reduction, enhanced user experience, higher approval rates, and reduced transaction costs.
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Tokenization Market Segmentation
The tokenization market covered in this report is segmented –
1) By Component: Solutions, Services
2) By Services: Professional Services, Managed Services
3) By Application Area: Payment Security, User Authentication, Compliance Management
4) By Vertical: Banking, Financial Services, and Insurance, Healthcare, IT And ITeS, Government, Retail And eCommerce, Energy And Utilities, Other Verticals
5) By Organization Size: Large Enterprises, SMEs
By Geography:The regions covered in the tokenization market report are Australia, Brazil, China, France, Germany, India, Indonesia, Japan, Russia, South Korea, UK, USA, Canada, Italy, Spain.
North America was the largest region in the tokenization market in 2023.
The Tokenization Global Market Report 2024 furnishes information about the global tokenization market, encompassing details like market size, projections for growth, segmentation across various sectors and regions, and an overview of competitors, including their revenues, profiles, and market shares. Furthermore, the report pinpoints potential opportunities and strategic directions derived from market trends and the strategies adopted by key competitors. The report also offers an assessment of how the COVID-19 pandemic, the Russia-Ukraine conflict, and increasing inflation have affected both global and regional markets, furnishing valuable strategic insights for businesses.
