"This continued transition from plastic cards to digital is all about providing consumers with the ability to make a purchase easily and safely. They would no longer need to store their actual card account number when shopping online or with a smart device; the token would serve as that stand-in," said Ed McLaughlin, chief emerging payments officer, MasterCard. "This proposed global standard builds on our track record of working across the industry to deliver safe and secure payment products. What we're introducing today is comparable to how the industry came together to develop and use the magnetic stripe, EMV and NFC on a global scale."
"By working together to form a common global standard for online and mobile shopping, we will be able to provide enhanced security, interoperability and consistency for all participants within the digital payments ecosystem," said Mike Matan, head of global network business, American Express. "In addition, we will be able to drive the rapid adoption and expansion of digital payments, delivering innovative new products and services that will allow consumers to realise the full potential of digital commerce in today's world."
How it works
Once a standard is agreed to and implemented, issuers, merchants or digital wallet providers would be able to request a token so that an account holder would used the token to process, authorise, clear and settle the online transaction in the same way traditional card payments are processed today. Tokens can be restricted in how they are used with a specific merchant, device, transaction or category of transactions.
The development of a global standard will enable a new generation of payment products, while maintaining compatibility with the existing payments infrastructure. Key principles driving the development of a token standard for digital payments include:
Ensuring broad-based acceptance of a token as replacement for the traditional card account Enabling all participants in the existing ecosystem to route and pass through the payment token
Enabling digital wallet operators, mobile application developers and others to easily and securely develop innovative payment products
Improving cardholder security with tokens that are limited for use in specific environments
The proposed framework has incorporated the input of many stakeholders, particularly card issuers and merchants. Over the coming weeks, the framework will also be presented to other partners and independent industry bodies, such as the Clearing House, PCI Security Standards Council and EMVCo, to align and further advance the standard.
MNW Price at posting:
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