Goodbye to manual card entry: Mastercard reveals when the new era of one-click online payments begins

Changes are on the way for online shopping and e-commerce. The traditional way of paying for items online by typing in your credit card details (card number and CVV security code) will soon be a thing of the past.

Mastercard and other card payment companies will be introducing a one-click button that will work on any online platform.

One of the reasons why services will be moving to a one-click system is to deter hackers who target merchant sites to steal consumer card information. According to a 2023 study by Juniper Research, merchant losses from online payment fraud will exceed $362 billion globally between 2023 to 2028, with losses of $91 billion alone in 2028.

The one-click system will protect consumers and their online data.

How the one-click payment method works

One-click payment processes or single payments allows merchants to give their customers the option to pay for a product/service by clicking on a single button.

This is possible through a process called tokenization, which replaces your 16-to-19-digit card number with a randomly generated one. Your actual card information is never transmitted during the transaction, and if hackers steal your token in a data breach, it’s basically worthless.

Mastercard developed the tokenization standard in 2013. It was then adopted as an industry standard by EMVCo, the consortium that manages payment standards globally. In 2014, Mastercard introduced its tokenization service, the Mastercard Digital Enablement Service, as part of the launch of Apple Pay.

Today, a quarter of all Mastercard transactions globally are tokenized, and this is accelerating by 50% year over year, because it has proved effective in reducing e-commerce fraud. It reduces the security burden on merchants, payment service providers and banks, and increases confidence in the digital economy for everyone.

Tokenization is enabled by the issuing bank and requires no effort on the part of the consumer — and no need to reissue existing cards. In fact, tokenization even makes your automatic payments more seamless.

Examples of tokenized transactions

Let’s say you make an online purchase from a store that you use regularly. The first transaction will require all of your payment details (first and last name of the cardholder, card number, CVV, expiration date). All of that information will be stored on the system so the next time you visit, it will recognize you as a returning customer.

Subsequent transactions will be available through a one-click payment option, which the system processes by accessing the pre-stored customer info, to charge the cardholder.

Tokenization alone won’t transform online checkout. It’s only the first step. The next will be payment passkeys for online transactions, using the biometric authentication which many people have to log into their smartphone. Payment passkeys allow you to authenticate your online purchases using your fingerprint, face scan or PIN on your personal device.

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