According to a new market report published by Transparency Market Research , the global tokenization market was valued at US$ 1,267.8 Mn in 2016 and is estimated to expand at a compound annual growth rate of 18.6% from 2018 to 2026, reaching US$ 6,901.1 Mn by the end of the forecast period. According to the report, North America was the largest contributor in terms of revenue to the tokenization market in 2016. This is primarily due to strong technological advancement and considerable application of tokenization in banks and financial institutions across the region
Need for payment card industry data security standard (PCI-DSS) compliance to secure cardholder data driving the global tokenization market
PCI DSS guidelines state that merchants and companies that process and store credit card data must fulfill precise audit requirements for managing cardholder data and privacy. Tokenization, a method of replacing sensitive data such as credit and debit card numbers with tokens, is one of the audit scope reduction and data protection methods that is recommended/suggested by PCI DSS. Tokenization helps merchants to comply with the global PCI-DSS and assists payment processors to keep cardholders’ data secure. This in turn is expected to drive the tokenization market during the forecast period.
Tokenization Market: Scope of the Report
The global market for tokenization is segmented on the basis of component, solution, enterprise size, end-use, and geographic regions. Based on component, the market has segmented into software, hardware, and services. Hardware component accounts for the largest share in terms of revenue in the global tokenization market. Hardware component used for tokenization are hardware security module (HSM) and other tokenization appliances which are used for interaction with HSM. Hardware devices are generally used in vault-based tokenization where sensitive data is stored within the user’s premises. However, service (tokenization-as-a-service) segment is expected to expand at the highest CAGR of around 19.8% globally during the forecast period.