How the Math Powering Payments Adds Up in the Quantum Era

At a first-principles level, math forms the foundation of the entire payments ecosystem.

There are encryption methods that rely on advanced mathematics to secure sensitive payment data; tokenization that replaces sensitive data, like card numbers, with a nonsensitive equivalent called a token; cryptocurrencies like bitcoin built entirely on mathematical principles. Math isn’t just at the heart of payments — it is the engine that drives innovation, security and trust in the financial ecosystem.

With the news that Google has created a state-of-the-art quantum chip, called Willow, that “paves the way to a useful, large-scale quantum computer,” the impact could serve as a wakeup call for payments and financial services to act now on opportunities to improve electronically secured systems.

Quantum computing poses a challenge to many encryption algorithms in use, particularly those based on asymmetric cryptography.

According to Hartmut Neven, founder and lead at Google Quantum AI, the Willow quantum chip performed a computation in under five minutes that would take one of today’s fastest supercomputers 10 septillion years, or 10 to the 25th power. “If you want to write it out, it’s 10,000,000,000,000,000,000,000,000 years. This mind-boggling number exceeds known timescales in physics and vastly exceeds the age of the universe.”

RSA and ECC (elliptic curve cryptography), which underpin most encryption in payments, rely on the difficulty of solving problems like integer factorization or the discrete logarithm problem. A quantum computer, like one enabled by Willow, could break these encryption schemes in seconds, rendering traditional payment encryption methods vulnerable to attack.

Read more: Making Sense of Quantum Data Defense in the Payments Space

Threat and Opportunity

As PYMNTS Intelligence has found, a central challenge the financial services and banking industry now faces is the need both to leverage new technologies and to master the art of securing them.

The advent of quantum computing presents a dual-edged scenario for payment systems. While quantum computers promise unprecedented processing capabilities that could revolutionize transaction speeds and security, they also pose a threat to current cryptographic standards.

Fortunately for the payment networks, FinTechs, banks, and other key stakeholders making up the global financial system, quantum computing has a way to go before being a commercially viable reality.

The payments community is also not waiting for quantum computers to fall into the hands of criminals to catch up with its implications. Developers and organizations are already working on, and have established, quantum-resistant solutions, including post-quantum (PQ) cryptography.

For example, PYMNTS covered this summer how, after an eight-year process, the U.S. Department of Commerce’s National Institute of Standards and Technology (NIST) has finalized its principal set of encryption algorithms designed to withstand cyberattacks from a quantum computer.

In October, the Pentagon’s chief information officer also announced a focus on migrating the defense department’s systems to quantum-secure networks.

Read more: Quantum Breakthrough From Microsoft Could Shorten Technology’s Go-to-Market Timeline

Future of Secure Payments

Quantum computing presents both risks and opportunities for cryptocurrencies like bitcoin and ethereum. Blockchain systems rely on cryptographic hash functions (e.g., SHA-256 for bitcoin) and ECC for wallet keys. While hash functions like SHA-256 are quantum-resistant, for now, private keys protected by ECC could be compromised by a quantum computer.

Cryptocurrencies may, at some point in the next 10 to 20 years, need to migrate to quantum-resistant cryptographic protocols. Projects like Quantum Resistant Ledger (QRL) are already exploring this, but there still remains a vast gap between the quantum capabilities that exist today and what will be needed to crack the encryption of popular cryptocurrencies like bitcoin.

In an August discussion with PYMNTS, Christopher Savoie, CEO at Zapata AI, clarified that while quantum technology holds tremendous promise, the current state of quantum hardware is not yet at a stage where it can outperform classical computers for most tasks. “Eventually, we’ll have hardware that does this natively,” Savoie said, “but it’s going to take time until we have fault-tolerant, perfectly computable systems.”

On the positive side of the future, within blockchain-based finance, quantum computing could also work to improve transaction validation speeds, optimize mining algorithms, and enhance smart contract efficiency.