Tokenization Solution Market Size (2024 - 2029)

Tokenization Solution Market Analysis

The Tokenization Solution Market size is estimated at USD 5.35 billion in 2024, and is expected to reach USD 12.07 billion by 2029, growing at a CAGR of 17.68% during the forecast period (2024-2029).

The main factors anticipated to propel the development of the tokenization market are the need to remain compliant and meet regulatory reporting standards, the growing need to guarantee continuous customer experience and maintain fraud prevention levels due to increasing financial frauds, and the need to reduce risk from data breaches.

• Data has become an intellectual property and companies that can distill intelligence from their data, whether in an innovative hospital or from an autonomous car, are expected to be the ones to lead. But, as the importance of data increases, the need for security and the cost of security also increases simultaneously. Hence, this need is generating the demand for tokenization solutions.
• The data proliferation in cloud services is also a significant factor in the growing adoption of tokenization solutions. Easy and affordable accessibility of cloud services is not only helping large enterprises but also SMEs in adopting a cloud-based model. As more data moves to the cloud, tokenization solutions are being used to secure data stored in the cloud.
• The increasing adoption of blockchain technology in almost every industry is another factor thriving the demand for tokenization solutions. The rising adoption of tokenization solutions in the real estate industry is also enhancing the accessibility of the sector. Tokenization solutions also mitigate high costs associated with the investment by providing the ability to convert assets into any token value. Through this, investors can buy even a tiny property share.
• There has been a continuously growing demand for secure payment gateways. Due to the increased adoption rate of payment gateways, customers are switching to more secure payment gateway options due to the currency involved.
• A tokenization solution, the concept of a surrogate being used to replace the sensitive value, has been prominently used in payments and financial services for a considerably long period. However, the consumer-driven demand for smart devices, coupled with rapidly changing technologies, has the industry buzzed about tokenization solutions innovations and advancements.

Tokenization Solution Industry Segmentation

Tokenization is the procedure of transforming sensitive data into anonymous, nonsensitive "tokens" that may be accessed by a database or internal system without putting it at risk of exposure. The tokens retain the original data's length or format even though their values are unconnected, allowing for continued business processes. The original sensitive information is securely kept off the company's internal systems. Tokenized data is indecipherable and irreversible, in contrast to encrypted data. This distinction is crucial because tokens can only be transformed back into their original forms with the existence of extra, independently stored data since there is no mathematical connection between the receipt and its actual number. As a result, the original sensitive data won't be compromised if a tokenized environment is breached.

The tokenization market is segmented by type (solution, services), by deployment (on-premise, cloud), by end-user industry (retail & e-commerce, transportation & logistics, BFSI, IT & telecommunications, healthcare, government, energy & utilities), and geography. The market sizes and forecasts are provided in terms of value in USD for all the above segments.