Egypt Plans Digital Payment Security through Tokenization Scheme
In a significant stride towards modernising its financial infrastructure, Egypt is set to implement card tokenisation technology by 2025. This move is part of a broader strategy to strengthen the country's digital payment landscape and establish a foundation for sustainable financial sector development.
Card tokenisation technology generates unique digital identifiers for each transaction, eliminating the need to store actual card data. This innovation significantly decreases the risk of data breaches and associated financial losses, making digital transactions safer for both consumers and merchants.
The Central Bank of Egypt's decision to adopt card tokenisation technology comes as part of a broader push across Africa to strengthen digital payment infrastructure. Egypt's digital transaction volume is projected to surge from EGP 7 trillion in 2021 to over EGP 22 trillion by late 2024.
The Payments Group and Mastercard have committed to realising the complete tokenisation of online transactions worldwide by 2030. This commitment underscores the critical importance of tokenisation in the digital payment ecosystem. Major card networks worldwide have recognised the value of this technology in securing sensitive card information and reducing fraud-related costs.
With card tokenisation, sensitive card information is secured within the bank's systems, and merchants receive only encrypted tokens for processing payments. This ensures the security and efficiency of digital transactions, a factor that is particularly important as digital transactions become increasingly prevalent.
Egypt's early adoption of tokenisation technology positions it as a regional leader in financial technology innovation. The migration to tokenised payments could significantly impact financial inclusion, making digital payment services more accessible to previously underserved populations. This could lead to increased trust in digital payments, accelerating the adoption of electronic transaction methods.
Through this strategic move, Egypt strengthens its position in the global digital economy while providing its citizens with safer, more reliable payment options. The implementation of tokenisation technology promises to reshape Egypt's payment landscape, demonstrating the country's commitment to building a resilient digital payment infrastructure capable of supporting future economic growth.
As an example, Nigeria launched the AfriGo domestic card scheme in early 2023, exemplifying Africa's push toward secure, independent payment systems. This advancement demonstrates the region's focus on building robust digital payment infrastructures that prioritise security and efficiency.
In conclusion, Egypt's commitment to implementing card tokenisation technology is a testament to its vision for a secure, efficient, and inclusive digital payment landscape. This strategic move positions the country as a leader in financial technology innovation and strengthens its position in the global digital economy.
