As online payments have surged and diversified, primary account numbers (PANs) are being exposed across more systems, more partners, and more checkout environments. PAN-based processing increases risk and operational strain for merchants, card brands, and issuers alike—driving fraud exposure, complicating compliance, and making sensitive data harder to manage at scale.
Fortunately, EMVCo introduced a solution over a decade ago that enables payments to move forward without disrupting how transactions work: the network token. This non-sensitive string of numbers can replace the PAN so that merchants can continue using existing payment flows while reducing their reliance on storing and transmitting raw card credentials.
After years of gradual adoption, tokenization—especially network tokenization—has reached meaningful scale. Around 30% of Mastercard transactions were tokenized as of late 2025, with adoption accelerating by 50% year over year. And with Mastercard announcing its goal to fully tokenize ecommerce transactions by 2030, it’s clear that merchants will increasingly be expected to shift toward token-first payment models.
Importantly, this doesn’t mean consumer cards (or PANs) are disappearing overnight. Physical and digital cards will continue to be issued for the foreseeable future. But the way those credentials move through merchant environments is changing fast: PANs are being pushed out of day-to-day payment flows in favor of more secure, dynamic tokenized credentials.
For merchants, employing a smart tokenization strategy is about so much more than security. It is quickly becoming the foundation of a flexible, orchestrated payment environment. In this article, we’ll discuss why tokenization matters now more than ever, what an effective token strategy looks like, and why payment orchestration goes hand in hand with tokenization.
Why PANs Are Being Phased Out of Merchant Payment Flows — And Why Now
When network tokens were introduced in 2013, the goal was not to eliminate PANs entirely, but to reduce unnecessary exposure of sensitive card credentials during online checkout. The advantage of tokens is clear: unlike PANs, which are static and reusable, network tokens can include built-in controls that limit how and when credentials can be used.
As adoption has steadily increased over the past decade, the digital payment space has evolved in tandem—making tokenization both easier to implement and more essential. Fraud continues to rise, customer expectations for seamless checkout are higher than ever, and issuer support for tokenization has expanded significantly. At the same time, tokenization is now embedded into more payment methods, APIs, and modern commerce platforms.
This widespread availability couldn’t be more crucial—not only because global fraud is poised to hit $91 billion by 2028, but because merchants are increasingly moving toward layered PSP stacks and orchestrated payment models that improve resiliency and performance. These multi-PSP environments, along with emerging agentic commerce models, rely on tokenized credentials that can be securely routed across PSPs, issuers, and card brands.
As a result, the question is no longer whether tokenization will become standard—it’s how quickly merchants can reduce dependence on PAN-based processing and prepare for a token-first future.
What Tokenization Means for Merchants—And Why Ownership Matters
The shift away from PAN usage does not mean that PANs will disappear altogether. PANs will continue to be issued to consumers and remain the underlying identifier of payment accounts. But they will increasingly stop flowing through merchant environments in their raw form. Instead, they’ll be converted into network tokens earlier in the transaction lifecycle.
As tokenization becomes the default, the question for merchants is no longer whether to tokenize, but how. Many merchants rely on payment service provider (PSP) tokens to secure cardholder data. Unlike network tokens, however, PSP tokens are non-portable and fully controlled by the provider. This limits a merchant’s ability to change PSPs, expand into new regions, or manage card lifecycle activity.
A merchant-owned tokenization approach addresses these constraints. By pairing network tokenization with a neutral orchestration layer, merchants can maintain control of their token vault and route transactions across hundreds of issuers and networks. This flexibility improves resilience and authorization performance while laying the foundation for automated and agent-based checkout flows.
Turning Tokenization Into a Strategic Asset With Orchestration
With Mastercard’s 2030 deadline for network tokenization approaching, merchants need a tokenization strategy that can support how payment and checkout flows are evolving. That means looking at token-first and orchestration solutions that combine network tokenization, multi-PSP support, and embedded intelligence. This full-stack approach allows merchants to:
Maintain control of their token vault
Implement automated routing and failover logic
Process transactions initiated by AI agents on behalf of customers
Unify data from multiple PSPs into a single source of truth
These capabilities are becoming foundational as payments operate across more PSPs, networks, and checkout paths. Orchestration paired with intelligence allows merchants to optimize routing and token usage over time, turning tokenization into a lever for higher approvals, resilience, and scalable growth.
Get Ready for the 2030 Tokenization Shift
The number of network tokenized transactions is expected to double between 2025 and 2029—and with agentic commerce surging, the need for secure, portable credentials is accelerating even faster.
The years ahead present a powerful opportunity for merchants to modernize their payment infrastructure. Tokenization decisions made now will shape your ability to expand market presence, optimize performance, and boost customer satisfaction as the industry moves toward tokenizing the vast majority of PAN-based transactions by 2030.
PANs and consumer cards aren’t going away tomorrow—but merchants that still rely heavily on PAN storage and PAN-based transactions will face rising operational and security pressure. Those who treat tokenization as a strategic foundation—rather than a basic compliance requirement—will be best positioned as checkout evolves toward automated flows where trust and security must be orchestrated across fragmented payment platforms.
Learn more about IXOPAY’s complete tokenization packages.
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