In a bold move driven by the goal of improvements in security and fraud reduction, Mastercard has vowed to eventually do away with the traditional 16-digit card numbers on its credit and debit cards by the year 2030. With this change, the company is one step closer to its larger strategy of using biometric authentication and tokenization to create an altogether more secure and convenient payment experience.
Why is it being changed?
The reason for removing card numbers is related to the theft of identity and card fraud. Online shopping is increasingly common, and this channel has very high rates of fraud when compared to in-store purchases. According to Mastercard, online fraud rates are seven times higher than those experienced in physical retail environments. This sounds an alarm for the real need for tightening payment security.
Mastercard’s new initiative targets such issues by moving away from static card details with the inclusion of more progressive security technologies. By moving away from visible card numbers, the company will help significantly reduce the potential for unauthorized access and fraud in “card-not-present” transactions, where fraudsters exploit stolen card information.
Transition to tokenization and biometric authentication
Tokenization and biometric authentication are at the heart of two new technological approaches being spearheaded by Mastercard.
- Tokenization: Replacing sensitive card information with unique digital tokens, used in processing transactions. The use of these tokens ensures that no sensitive data is ever exposed, therefore greatly reducing the potential for data breaches. Currently, Mastercard processes an average of 4 billion tokenized transactions in a month—a clear testimony to both effectiveness and scalability.
- Biometric authentication: In addition to tokenization, Mastercard is also embedding biometric authentication—like face recognition or fingerprints—into its network. Consumers will, therefore, in time, confirm a purchase with their physical characteristics rather than using card numbers or passwords. The change not only assures much better security but also makes checkout faster and more convenient.
Initial rollout and future plans
The country will see its first numberless credit card issued with the collaboration between Mastercard and AMP Bank. It will also introduce Australia’s first numberless debit card, designed specifically for small businesses, allowing the cardholders to view their payment information securely through a mobile banking app. The AMP Bank app will boast top-of-the-line security measures, including multimodal biometric authentication—meaning customers can now safely manage their accounts without exposing sensitive information.
Over the next few years, as this rollout continues, other banks will likely follow with their own integrations of related technologies. Mastercard sees a future where, by 2030, manual entry of card details will be a thing of the past across all markets.
How it affects consumers and merchants
The benefits to consumers will be in the form of greater security and convenience:
- Less chance of fraud: There are no visible card numbers, so the possibility of becoming an identity theft victim decreases immensely.
- Streamlined transactions: With biometric authentication, checkouts will be fast, hence there is no manual entering of data. This could prevent cart abandonment in e-commerce.
For the merchants, though, the integration of tokenization means they will be able to continue accepting payments without rebuilding their existing infrastructure. Mastercard has underlined the fact that the changes will be compatible with current systems; hence, all the new security measures will cause minimal disruption.
Addressing concerns about security
Some consumers may be reluctant to move away from traditional card numbers, but Mastercard assured that the innovations are designed with security as a top priority. It has invested heavily in encryption technologies and adherence to international security standards to secure consumers’ data.
As cyber threats continue to evolve, so must our defenses. A move toward biometric authentication is a proactive step in protecting financial transactions from increasingly sophisticated fraud tactics.
Mastercard’s decision to have the 16-digit card numbers erased by 2030 is a landmark in the development of payment technology. With tokenization and biometric identification, Mastercard can tackle the current security issues and lay a path toward making the checkout experience of a consumer easier and more secure around the world.
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