The move to standardize tokens by the major payment networks has broad implications for how mobile commerce, including NFC payments, will be rolled out.
Backers say they are building a more secure, interoperable system for replacing card account numbers for conducting commerce via various devices, channels and types of merchants. But the tokens would also provide a foundation for enabling proximity payments at the physical point of sale without secure elements, many observers agree.
Global standards organization EMVCo reached the first milestone in its planned specifications for payment tokens March 11, releasing its technical architecture for the tokenization standard on a fast-tracked schedule.
The move to enable tokens to replace primary account numbers, or PANs, has gained momentum following data breaches late last year hitting such big U.S. retailers as Target; and also with the introduction of host-card emulation, or HCE, technology by Google for Android.
HCE allows issuers to emulate card applications on NFC phones without using secure elements. That is expected to create demand for tokens that can be preloaded on the phones, avoiding the necessity for an issuer to go to the cloud for the credentials during the transaction.
In this article:
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Graphics:
Flowchart: Face-to-face transaction using tokens under EMVCo tokenzation technical framework
Among Topics Covered:
Structure of planned tokenization standard by major payment networks and their standards organization, EMVCo
Expected impact on host-card emulation rollouts
Pitching the security angle
New Entity in tokenization ecosystem: token service provider
Example of a mobile transaction using the proposed standard
Are the payment networks needed for global tokenization?
Sources Quoted:
Brian Byrne, director of operations for EMVCo
James Anderson, group head, emerging payments, MasterCard Worldwide
Christina Hulka, chairwoman, board of managers, EMVCo
Dickson Chu, principal, DCAdvisors
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