It is anticipated that the value of tokenised transactions would quadruple by 2029, from $283bn in 2025 to $574bn. The quick emergence of mobile payments, digital transformation, and e-commerce are major factors driving the market's expansion.
Peter Ludi, Business Development Executive at redPanda Software & Solutions. Image supplied
It’s also driven by security, personalisation and privacy. While effortlessly applicable across multiple markets, in retail, tokenisation is rapidly becoming a smart way to secure transactions, helping retailers navigate a market where customers want recognition and convenience without compromising on their security or identity.
These demands have created a space for technologies that can solve immediate operational constraints and contribute to long-term competitiveness.
Tokenisation changes the game. These digital units of value, recorded on a secure and shared ledger, represent something real. They can be used to transform sensitive payment data to random, unique identifiers that can’t be exploited outside their designated use cases.
And to represent behaviours and interactions across loyalty points, proof of purchase, customer identity, supplier rebates or data usage consent. These tokens represent value that can be trusted by multiple parties without a single central owner.
One of the primary differences between a traditional database entry and a token comes down to verification.
A purchase logged in a point-of-sale (POS) system sits in one environment. A token, on the other hand, records the same purchase but can be seen and acted on by the retailer, the customer and the supplier.
It carries its own rules, which include data points such as date of expiry, single redemption value, or channel-specific use cases. And the token can move instantly across different systems without reconciliation.
The framework created by tokens gives retailers access to deeper operational consistency. The architecture gives them the flexibility to operate across multiple formats or franchises in a far more efficient and secure way.
Think unified
Loyalty programmes are often fragmented. The points earned in one format don’t always translate to another, and customers can’t smoothly redeem their points or their value across different brands.
It’s easy to see how tokens can change this story into one that really energises customer engagement – the technology creates a portable customer identity that then carries all the loyalty points, receipts, interactions and permissions through multiple POS and ecommerce systems.
It solves a long-standing issue where customers battle to be rewarded in the same way across a group. Their token, however, becomes usable in any store or channel with a single consent record.
Think value
Tokens provide a foundation for faster and auditable settlements. They offer a level of verification that helps retailers and suppliers reconcile rebates, credit flows and franchise obligations with markedly less friction.
The value here is felt in improved financial management and visibility, as well as in improved relationships throughout the supply chain.
This value extends towards personalisation. Retailers want to change their approaches from static rules to more contextual offers that are driven by real-time customer behaviours. Mass promotions are losing relevance because customers want products that are relevant to them and offer instant value they can use immediately.
Loyalty is moving away from broad points-for-spend models and towards permission-based personalisation. A consent token acts as a reusable and verifiable proof of permission, which customers can use to allow or withdraw data sharing.
Retailers can use these tokens to maintain transparency and compliance, which is increasingly important in markets governed by PoPIA and GDPR.
An intelligent change
Provenance tokens are another variation that allows retailers to track products from farm to shelf. This is a very smart move for retailers wanting to build foundations on sustainability and become increasingly compliant with sustainability reporting. These tokens provide a verifiable proof of origin, reduce fraud and support ethical sourcing.
Of course, AI is entering the token conversation. The technology is moving from dashboards to orchestration, and tokens are providing a trusted event layer with verified input that AI agents can act on.
The combination of token and AI supports the retailer’s ability to create dynamic promotions, benefit from predictive replenishment and even create real-time in-store engagement.
AI has the ability to take contextual data such as local weather, store traffic, stock movement and customer identity and trigger personalised basket-building. Think about the magic that can happen if a retailer can create contextualised promotions that respond to what’s happening in the store, right at that moment.
Tokenisation also influences the data economy. When verified consent is partnered with portable identity, retailers can trade insights ethically and transparently. This strengthens partnerships and allows for the sector to become more data-driven with trusted architectures for sharing and monetising information.
The technology doesn’t require a full rebuild of retail systems either. It’s a layer added onto existing POS, ERP and CRM environments, and retailers can run small and controlled pilots that allow them to test token validity across their key areas, whether it’s loyalty, identity or financial.
Once these are proven, they can be easily scaled across the business.
Innovation needs to work under pressure, and it needs to strengthen operational resilience. Disruption is fine when it’s your business disrupting the market, but not when technology is impacting your operations.
Tokens work, but their integration must be as smart as the technology that drives them. So, take the step, but take it with a partner who knows the route.
