The Surge Of Digital And Contactless Payments Fuels Tokenization Market Growth: Strengthening the Growth Trajectory of the Tokenization Market

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Tokenization Market Size Valuation Forecast: What Will the Market Be Worth by 2025?
The market size for tokenization has witnessed remarkable expansion in the past few years. It is expected to increase from $3.38 billion in 2024 to about $4.13 billion in 2025, experiencing a compound annual growth rate (CAGR) of around 22.1%. The substantial growth seen in the previous times is largely a result of the rise of mobile payments and e-commerce, incidences of data breaches, an upswing in digital transformation, measures for fraud prevention, and growing apprehension about consumer privacy.

Tokenization Market Size Forecast: What's the Projected Valuation by 2029?
The market for tokenization is projected to experience significant expansion in the upcoming years, with its size predicted to reach $10.65 billion by 2029, growing at a CAGR of 26.8%. This growth surge during the forecast period can be credited to a myriad of factors, including escalating mobile and contactless payments, cross-border transactions, securing healare data, bolstering supply chain security, and the rise of decentralized finance. The period also expects to witness key trends such as incorporating blockchain, tokenizing physical assets, the emergence of non-fungible tokens (NFTs), the integration of AI and machine learning, and the provision of tokenization as a service (TaaS).

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What Are the Drivers Transforming the Tokenization Market?
The tokenization market's growth is anticipated to be fuelled by the expanding adoption of digital and contactless transactions. Tokenization ensures the safety of critical data by substitifying it with a value of similar format and length, but devoid of significant meaning. Opting for card tokenization as a payment method offers more security than encryption as it involves the use of a smart map rather than a cryptographic key, making it resistant to breaches. The surging popularity of digital payments leads to a high demand for transaction security, subsequently stimulating the tokenization market. For instance, Clearly Payments Inc., a payment processing company based in Canada, noted that the United Kingdom saw an impressive rise in transactions in 2023, reaching 18.3 billion, primarily due to the comprehensive utilization of contactless cards and mobile payments. At the same time, Australia's transactions grew steadily from 2.5 billion to 5.5 billion, highlighting the country's strong digital payments infrastructure. Hence, the escalating digital transitions and payments are projected to boost the tokenization market.

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What Long-Term Trends Will Define the Future of the Tokenization Market?
Several prominent players in the tokenization market are engaging in strategic partnerships to maintain their positions in the market for tokenization services. Through combined expertise, resources, and technology, these collaborations stimulate innovation, enhance capabilities, and bring about mutually beneficial synergies in the tokenization market. For example, in August 2022, Skyflow, a data privacy vault firm based in the United States, deepened its collaboration with Visa Inc., an American credit card service corporation, to elevate network tokenization to the security standard for payments. This partnership simplifies the integration of network tokenization ensuring ease of use and security in line with Skyflow's commitment to boosting the security of the entire payments ecosystem. Leveraging Token ID, a solution provided by Visa, Skyflow promotes the uptake of network tokenization among merchants, payment facilitators, and gateways. This results in advantages such as lowered fraud, improved user experiences, better approval rates, and decreased transaction costs.

Which Segments in the Tokenization Market Offer the Most Profit Potential?
The tokenization market covered in this report is segmented -

1) By Component: Solutions, Services
2) By Services: Professional Services, Managed Services
3) By Application Area: Payment Security, User Authentication, Compliance Management
4) By Vertical: Banking, Financial Services, And Insurance, Healare, IT And ITeS, Government, Retail And eCommerce, Energy And Utilities, Other Verticals
5) By Organization Size: Large Enterprises, SMEs

Subsegments:
1) By Solutions: Tokenization Software, Payment Tokenization Solutions, Data Tokenization Solutions, Cloud-based Tokenization Solutions
2) By Services: Consulting Services, Integration Services, Managed Services, Support And Maintenance Services

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Which Firms Dominate the Tokenization Market by Market Share and Revenue in 2025?
Major companies operating in the tokenization market include American Express Company, Visa Inc., Mastercard Inc., Fiserv Inc., 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

Which Regions Offer the Highest Growth Potential in the Tokenization Market?
North America was the largest region in the tokenization market in 2024. 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.

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