UBS says payment networks could earn more as tokenization expands, lifting the outlook for Visa and Mastercard

Visa and Mastercard could benefit from a longer-term revenue tailwind tied to tokenization, according to an assessment cited by UBS in a recent market report. Tokenization is the process of replacing a card’s sensitive data with a substitute value, or “token,” so merchants and payment systems can complete transactions without using the underlying card number. As digital payments expand, UBS expects networks and their partners to capture more value from the technology that helps reduce fraud risk and keep card data protected.

In the report, UBS’s view centers on the idea that payment networks can charge for the technology and services that support tokenization and secure digital transactions. That framing matters because Visa and Mastercard monetize not only transaction volumes, but also the infrastructure and rules that enable payments at scale across banks, merchants, and processors.

The market note links the potential revenue implication directly to card networks’ tokenization-related fees, suggesting that even if broad card spending growth remains the primary driver of activity, incremental fees tied to security and authorization processes could add stability to earnings over time. For investors, the argument is that a payment shift toward more digital and card-not-present transactions could increase demand for network security capabilities, not just transaction counts.

The same assessment also places Mastercard in the peer comparison. Both companies operate card networks, and both have been expanding the use of token-based payment flows to support payments on mobile devices and in digital commerce. UBS’s comment, as presented in the market note, is that the fee model linked to tokenization could support growth for both firms as adoption rises across issuers and merchants.

Still, the report provides limited detail beyond the general thesis. It does not spell out how large a tokenization fee contribution could become, what portion of each company’s total revenue it might represent, or the pace at which tokenization adoption would need to accelerate for the thesis to show up clearly in financial results.

For Visa and Mastercard, the practical “why” is straightforward: digital payments require constant authentication, fraud prevention, and secure data handling. Tokenization is designed to reduce exposure by preventing merchant systems from receiving the full card number, and that in turn can lower the risk profile of processing and authorization. If network participation in token management and authorization grows, the networks can be positioned to collect fees tied to those capabilities.

The broader sector context is that payments is shifting from traditional card-present retail to a higher mix of e-commerce and mobile, where security and token-based workflows are increasingly standard. That shift can change the mix of what networks monetize, potentially increasing the importance of technology-related pricing rather than purely volume-based mechanics.