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The world of the Internet of Things (IoT) is about to undergo an extraordinary transformation: a recent study by Juniper Research, respected experts in the payments markets, reveals a staggering forecast driven by blockchain and tokenized transactions.
The number of IoT transactions using networked tokens, involving connected vehicles and smart home devices, will rise to 62.7 billion by 2028, a seismic increase from the 10.5 billion recorded in 2023.
Privacy: the backbone of IoT blockchain payment security and tokenized transactions
Network tokenization is positioned as the backbone of the IoT payments-enabled device ecosystem, and is critical in addressing the growing threat of fraud.
As IoT payments seek greater acceptance in the traditional payments landscape, the need for technology that can protect critical payment data becomes paramount.
Network tokenization is emerging as the panacea for this situation. Its absence would throw IoT payments into a maelstrom of challenges, including reliability and usability, and ultimately stifle their wider adoption.
As Cara Malone, author of the study, succinctly points out:
“IoT payment providers must inextricably integrate tokenisation into their systems in order for IoT payments to evolve into a secure transaction mode and mitigate CNP (card not present) fraud.
Tokenization is key to ensuring that IoT payments meet the security standards set for card present transactions, thereby facilitating the scalability of IoT payments.”
Network tokenization: the bane of shopping basket abandonment
Integrating transactions with network tokens not only streamlines the payment process, but also enhances security measures.
Juniper Research predicts that there will be a growing demand for network tokenization solutions across multiple payment types, given the importance of improving conversion rates and reducing fraud.
Driven by this surge in demand, we expect the volume of network tokenized transactions worldwide to grow from 140 billion in 2023 to 407 billion in 2028.
The recently launched market research suite represents a milestone in the evaluation of the network tokenization market, offering an unprecedented assessment.
It provides comprehensive analysis and forecasts, including over 48,500 data points across 60 markets over a five-year period. It also includes a ‘competitor ranking’ and an in-depth exploration of the market’s future prospects.
In summary, the trajectory of IoT transactions using network tokens is set to experience a staggering 498% growth by 2028, driven by the need to minimise friction and ensure uncompromising security in the dynamic IoT payments space.
The triumph of network tokenized IoT transactions
The meteoric rise of IoT transactions using network tokens represents a watershed moment in the world of digital payments and IoT technology.
Delving into the intricacies of this paradigm shift, it becomes clear that this growth is not a simple coincidence, but rather the result of a finely tuned interplay of factors.
1. Security beyond borders
At the heart of this transformation is the quest for security. Network tokenization provides the necessary armour, offering a level of protection that rivals traditional card-present transactions.
It is the antidote to the malaise of Card Not Present (CNP) fraud, which has been a constant concern in the payments landscape. By tokenizing the network, IoT payments are on the verge of achieving a level of security that could make them the industry’s gold standard.
2. A boost to conversion rates
Network tokenized transactions bring a level of simplicity and security that is a boon to conversion rates. In a landscape where every transaction counts, reducing friction and improving security can be a game changer.
With these benefits, shopping cart abandonment becomes less of a concern and users are more likely to complete their purchases. This is a key driver in the adoption of network tokenization solutions.
3. Proliferation of IoT devices
The growth of IoT transactions using network tokens is inextricably linked to the proliferation of IoT devices.
Wearables, connected vehicles and smart home devices are becoming increasingly commonplace in our daily lives.
As more devices become payment enabled, the demand for secure and convenient payment methods naturally grows.
Network tokenization is the linchpin that ties these disparate devices together, ensuring secure and seamless transactions.
4. The expanding market landscape
The rise of network tokenized IoT transactions is not isolated, but part of a wider trend in the payments industry. The market landscape is evolving, with a dynamic interplay between demand and technology.
Juniper Research’s suite of market research provides a comprehensive view of this evolving landscape. It is a testament to the continued growth and evolution of the sector, and provides insight into the competitive landscape and future opportunities.
5. Looking to the future
Looking ahead to 2028, the outlook for IoT transactions using network tokens is promising. The numbers speak for themselves: 62.7 billion transactions, an increase of almost five times compared to 2023.
This growth is testament to the resilience and adaptability of the payments industry, and the significant potential of IoT technology.
Conclusion
In conclusion, the future of IoT transactions using network tokens is nothing short of extraordinary. It promises to reshape the payments landscape, offering security and convenience in a world where digital transactions are the norm.
The impetus for this growth is clear: the need to strike a balance between reducing friction and improving security. As we approach 2028, it’s a journey worth keeping an eye on, as it promises to revolutionise the way we make payments in an increasingly connected world.