tokenization Global Market Report 2024

The tokenization market size has grown exponentially in recent years. It will grow from $2.8 billion in 2023 to $3.45 billion in 2024 at a compound annual growth rate (CAGR) of 23.2%. The growth witnessed in the historic period can be attributed to various factors including the expansion of e-commerce, the rise of mobile payments, instances of data breaches, a significant push towards digital transformation across industries, efforts in fraud prevention, and rising concerns regarding consumer privacy.

The tokenization market size is expected to see exponential growth in the next few years. It will grow to $8.32 billion in 2028 at a compound annual growth rate (CAGR) of 24.6%. The forecasted growth is expected to be driven by factors such as the rise in cross-border payments, the continuous growth of mobile and contactless payment systems, an increased focus on healthcare data security, enhancements in supply chain security, and the emergence of decentralized finance. Additionally, key trends projected in the forecast period involve the integration of blockchain technology, the tokenization of physical assets, the adoption of non-fungible tokens (NFTs), the integration of AI and machine learning, and the rise of tokenization as a service (TaaS).

The expansion of the tokenization market in the forecast period is expected due to the increasing adoption of digital and contactless payments. Tokenization, a method replacing sensitive data with non-sensitive equivalents, offers enhanced security compared to encryption. The surge in digital transactions, as per Indian government data in February 2023, illustrates the growing demand for secure payment methods, affirming the projected growth of the tokenization market.

The projected expansion of the tokenization market is closely tied to the surging growth of E-commerce. E-commerce, involving online transactions among businesses, consumers, and businesses, necessitates secure handling of financial data, such as credit card details. Tokenization serves as an added security layer by substituting sensitive card details with unique tokens. For instance, projections by the international trade administration in 2023 estimate the B2B e-commerce market to hit USD$36 trillion by 2026 and B2C e-commerce revenues reaching USD$5.5 trillion by 2027, sustaining an annual growth rate of 14.4%. This global E-commerce expansion is poised to drive the tokenization market.

Major players in the tokenization market are actively engaging in strategic collaborations to fortify their presence and offerings. Collaborations between companies drive innovation and synergies by merging diverse expertise and technologies. For example, in August 2022, Skyflow, a US-based data privacy vault company, deepened its collaboration with Visa Inc., a US-based credit card services corporation, to establish network tokenization as the secure payment standard. This partnership simplifies network tokenization implementation, focusing on security enhancement within the payment ecosystem. By utilizing Token ID, a Visa Solution, Skyflow facilitates wider adoption among merchants, payment facilitators, and gateways, promising advantages such as reduced fraud, improved user experience, higher approval rates, and decreased transaction costs.

Key players in the tokenization market are prioritizing the development of intelligent solutions by incorporating cutting-edge technologies into their tokenization services. Integrating advanced technologies in this market segment not only bolsters security measures but also ensures compliance and flexibility in navigating evolving digital transaction landscapes. For example, in October 2023, JPMorgan Chase & Co, a multinational financial services firm based in the US, launched a Blockchain-Based Tokenization Service, dedicating a specialized team to craft and commercialize blockchain-driven solutions. This team focuses on rapid prototyping and deployment methods, delivering services such as digital applications on a tokenization platform, customized use cases, and product development across diverse sectors. Additionally, Onyx tested the world's maiden bank-led tokenized value transfer in space, signifying a commitment to exploring innovative applications merging blockchain and the Internet of Things.

In March 2021, Lookout, a US-based company specializing in endpoint security, completed the acquisition of CipherCloud for an undisclosed sum. This strategic move aimed to integrate CipherCloud’s SASE (Secure Access Service Edge) technologies into Lookout's Mobile Endpoint Security platform. By combining forces, Lookout sought to address the challenges arising from using disparate security solutions from multiple vendors. CipherCloud, another US-based software firm, offered cloud application discovery, risk assessment, data protection, searchable encryption, tokenization, data loss prevention, key management, and malware detection services.

Major companies operating in the tokenization market report are 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.

North America was the largest region in the tokenization market in 2023. Asia-Pacific is expected to be the fastest-growing region in the forecast period. The regions covered in the tokenization market report are Asia-Pacific, Western Europe, Eastern Europe, North America, South America, Middle East, Africa. The countries covered in the tokenization market report are Australia, Brazil, China, France, Germany, India, Indonesia, Japan, Russia, South Korea, UK, USA, Canada, Italy, Spain.

The essence of tokenization lies in its core components: solutions and services. Tokenization solutions are customized to safeguard sensitive data, including magnetic swipe details, primary account numbers, and cardholder information, catering to unique client requirements. Diverse tokenization services encompass professional and managed services. Its application spans payment security, user authentication, and compliance management. Tokenization finds its footing across multiple verticals, namely banking, financial services, insurance, healthcare, IT and ITeS, government, retail, ecommerce, energy, utilities, and other sectors, serving both large enterprises and SMEs.

The tokenization research report is one of a series of new reports that provides tokenization market statistics, including tokenization industry global market size, regional shares, competitors with tokenization market shares, detailed tokenization market segments, market trends and opportunities, and any further data you may need to thrive in the tokenization industry. This tokenization research report delivers a complete perspective of everything you need, with an in-depth analysis of the current and future scenarios of the industry.

The tokenization market includes revenues earned by entities by providing services such as Vaultless tokenization, vault tokenization, NLP tokenization, NFT tokenization, and governance tokenization. The market value includes the value of related goods sold by the service provider or included within the service offering. Only goods and services traded between entities or sold to end consumers are included.

The market value is defined as the revenues that enterprises gain from the sale of goods and/or services within the specified market and geography through sales, grants, or donations in terms of the currency (in USD, unless otherwise specified).

The revenues for a specified geography are consumption values that are revenues generated by organizations in the specified geography within the market, irrespective of where they are produced. It does not include revenues from resales along the supply chain, either further along the supply chain or as part of other products.