Mastercard Targets Passwordless Payments in Digital Push

As global cybercrime threats loom ever larger, Mastercard has unveiled plans to reinvent digital payments security through a combination of artificial intelligence and advanced authentication systems. 

The payments giant's vision extends far beyond conventional security measures, encompassing a fundamental reshaping of how consumers and businesses interact with financial services through 2025 and beyond.

Digital Identity and Security

Central to this transformation is Mastercard's ambitious goal to eliminate physical card numbers and passwords from online transactions by 2030. 

The shift comes at a crucial moment, with cybercrime costs expected to surge to US$10tn annually by 2025. 

Rather than relying on traditional security measures, the company's strategy leverages a sophisticated blend of tokenisation technology, biometric authentication and its Click to Pay digital wallet system.

The company's Decision Intelligence Pro platform already demonstrates the potential of this approach. 

By processing one trillion data points within milliseconds, the system has achieved a 20% improvement in fraud protection rates across Mastercard's network, with some implementations reaching 300%. 

In the UK, this technology has evolved further, with the Consumer Fraud Risk system now catching fraudulent transactions before funds even leave customer accounts.

Digital Inclusion and Emerging Markets

This push toward enhanced security coincides with rapid changes in how people access financial services, particularly in developing markets. 

Through its Pay Local service, Mastercard is bridging the gap between international card payments and local digital wallets, allowing cardholders to connect their existing accounts to regional payment systems without additional prepaid accounts.

These digital wallets have become essential financial tools, expanding beyond simple payments to encompass identity verification, loyalty programmes and healthcare services. 

In emerging markets, where traditional banking infrastructure may be limited, these platforms often serve as primary financial accounts for unbanked populations, making their interoperability crucial for financial inclusion.

Business Evolution and Infrastructure

The business-to-business sector is undergoing its own revolution. Virtual cards, which generate temporary numbers linked to credit lines, are increasingly integrated with enterprise resource planning software. 

This integration is part of a broader transformation in business payments, with the embedded finance market for small enterprises projected to reach US$124bn by 2025.

For small businesses, the pandemic-driven shift to electronic payments has opened doors to previously inaccessible technology. 

Centralised platforms now offer these merchants sophisticated tools for administration, marketing and data analysis, marking a significant democratisation of financial technology.

Real-time Payments and Blockchain Integration

The broader payments landscape continues to evolve rapidly. Real-time payment systems, now operating in more than 100 countries, are expected to process 575 billion transactions by 2028 – accounting for 27% of global electronic payments. 

Meanwhile, blockchain technology is moving beyond cryptocurrency, enabling new approaches to everything from capital markets to trade finance.

This development has prompted unprecedented collaboration between traditional financial institutions and cryptocurrency-focused firms, all seeking to create more efficient payment solutions. 

The tokenisation of assets through blockchain technology is particularly promising, enabling the digitisation of various economic activities across the financial spectrum.

In physical stores, contactless payments have become the norm, representing two-thirds of all in-person transactions on Mastercard's network. 

The company's Tap on Phone technology has further simplified this transition, turning standard mobile devices into payment terminals and eliminating the need for complex infrastructure, particularly benefiting small businesses and individual entrepreneurs.

Collaborative Ecosystems

Looking ahead, Mastercard sees collaboration as the key to innovation. Partnerships between financial institutions, technology companies and government bodies are increasingly focused on embedding new technologies and expanding financial access, with financial technology firms playing a crucial role in simplifying services and ensuring trust in digital transactions.

“By 2030, shoppers won't need to punch in a password or one-time code to make a transaction online, thanks to the combination of tokenisation, biometric authentication and the Click to Pay digital wallet,” says Mastercard in its announcement.

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