Mastercard says 30% of its transactions in 2024 were tokenized

Mastercard announced today that it will tokenize 30% of its transactions in 2024. The company disclosed this in its US Securities and Exchange Commission (SEC) filing, showing innovation within its payment ecosystem.

According to the filing, Mastercard has provided technologies to improve its payment ecosystem and create a better customer experience. It further explained that its blockchain strategy seeks to make crypto more accessible by integrating it into its ecosystem.

In order to do this, it relies on the Mastercard Developer platform which provides its customers and partners with all the tools to access its services.

The filing stated:

“By providing a single access point with tools and capabilities to find APis across a broad range of Mastercard services, we enable easy integration of our services into new and existing solutions.”

Meanwhile, the company also emphasized its partnership with crypto companies and how it has enabled their operations. According to its report, Mastercard works with several crypto firms to enable transactions and payments with crypto.

The firm said:

“We are focused on supporting blockchain ecosystems and digital currencies. We integrate with financial institutions using the Mastercard Multi-Token Network™ to enable programmable payments.”

However, crypto and blockchain technology are not the areas that Mastercard is focusing on. The company also revealed significant developments in its physical payment services and the results of the improvements.

Per the report, 70% of all in-person purchases using Mastercard cards in 2024 were contactless payments and the number of transactions using Mastercard Click to Pay system increased by 100% year over year.

While Mastercard’s innovative efforts improved user experience, the company noted that transactions are more secure. According to its report, it replaced card numbers with secure tokens by upgrading its authentication system to make transactions more secure and effective.

Mastercard identifies stablecoins and crypto as competition

Meanwhile, Mastecard’s adoption of new technologies proved successful in its performance last year. Per the report, its net revenue was $28.2 billion, 12% higher than 2023.

Its performance charts also show growth in several other financial metrics, showing that its embrace of innovation transforms its business and improves its financial performance.

Meanwhile, the Mastercard filing highlights how the payments giant is getting involved in the fintech space. Over the past few years, it has gotten several patents for blockchain applications and launched products based on the technology.

With crypto and blockchain adoption growing, the company is one of the leading TradFi institutions in terms of crypto partners and products. Mastercard’s blog post published earlier this month predicted that the crypto industry would have clearer regulations in 2024.

So far, its efforts have been successful, with the company partnering with JP Morgan and Crypto.com on crypto products. This and other factors helped the company record $28.2 billion in revenue last year.

Nevertheless, the company is still concerned about how crypto and stablecoins could affect its business. In its report, it identified products like stablecoins and central bank digital currencies (CBDCs), noting that technological advancements could limit its role as a payments facilitator.

It said:

“Governments may promote their own national or international payments platforms, potentially putting us at a competitive disadvantage in those markets, or requiring us to compete differently.”

Interestingly, the stablecoin sector is already threatening TradFi payments. Data shows that the annual stablecoin transaction volume in 2024 was 7.68% higher than the combined volume for Mastercard and Visa despite accounting for less than 1% of the US dollar supply.

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