NEW YORK, Aug. 5, 2025 /PRNewswire/ -- Business models are adapting to keep pace with emerging players and evolving trends in the payment tokenization market, generating upselling and development opportunities for token service providers (TSPs), payment technology providers, and tokenization platform providers. ABI Research, a global intelligence firm, forecasts that network tokenization revenue will form the bulk of the tokenization market's revenue in the coming years, reaching USD$7 billion by 2032. The influx of card issuers and payment networks into the tokenization market via network tokenization offerings creates new opportunities for other vendors in the payment tokenization market. At the same time, however, it also threatens to squeeze traditional TSPs out of this segment.
"As payment giants like Visa, Mastercard, and American Express make their official entry into the tokenization market via network tokenization solutions, the pressure is on Token Service Providers (TSPs), payment technology providers, and tokenization platform providers to prioritize diversification and modularity," said Aisling Dawson, ABI Research Senior Analyst. "In addition, these traditional players need to augment built-in, value-add features in their services and platforms in order to remain key market players in the tokenization ecosystem."
"While critical revenue opportunities remain for non-network tokenization, vendors must ensure their business models are flexible enough to deal with the influx of payment giants like Visa, Mastercard, and American Express into the tokenization market," Dawson said. "These card issuers and payment networks' network tokenization services will begin to gain traction ahead of the 2030 Mastercard deadline for sunsetting manual card input on Card Not Present (CNP) transactions."
Successful vendors in this space are prioritizing differentiation, strategic market positioning, and innovation-particularly in mobile SDK capabilities, web-based push provisioning, irreversible tokenization, and advances in passkey and biometric authentication. This includes TSPs and payment technology providers like Thales, IDEMIA, Futurex, Pagos, Bluefin, Fortanix, Giesecke+Devrient, and CPI Card Group. Concurrently, as tokenization adoption increases, tokenization orchestration platforms have a growing space in the ecosystem, with vendors like Spreedly, VGS, and Basic Theory currently out in front.
The push towards cryptoagility is experiencing a new lease on life given the prospect of quantum computing. In addition, tokenized IoT wearables transactions are expected to boom throughout the next five years, stimulating increased payment token issuance. By 2027, the number of payment tokens issued is expected to constitute twice the number of physical payment cards in circulation.
"While there are plenty of emerging opportunities for revenue generation and upselling in the payment tokenization market, vendors must adapt their business models to reflect the new challenges in this space," Dawson said. "Exploiting market disruptions such as the European Commission's decision regarding NFC access on Apple's iOS digital wallets and shifts in the legislative securitization of tokenization, introduced by the new PCI-DSS security requirements for tokens, will be critical to achieving long-term success in this market.
"Winning commercial strategies should focus on the new forms of tokenization entering the market," Dawson said. "These approaches should recognize the continued importance of standards and regulation in the payments space, and optimize solution deployment through customizable options, robust partnerships, collaborative sales models, and simplification of the tokenization migration process for prospective merchants and Payment Service Providers (PSPs)."
These findings are from ABI Research's Payment Tokenization: Business Models and Ecosystems Platform Analysis report. This report is part of the company's Digital Payment Technologies research service, which includes research, data, and ABI Insights.
About ABI Research
ABI Research is a global technology intelligence firm uniquely positioned at the intersection of technology solution providers and end-market companies. We serve as the bridge that seamlessly connects these two segments by providing exclusive research and expert guidance to drive successful technology implementations and deliver strategies proven to attract and retain customers.
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