Tokenization is a way of making payments more secure, by converting credit card and personal information into a 16-digit code—also referred to as a token. Tokens enable merchants and customers to shield their identifying information, making it more difficult for fraudsters to commit identity fraud.

In a recent article, we discussed the advantages and disadvantages of tokenization. While tokenization may be a leap forward in the industry, Visa and Mastercard are under investigation over debit-card routing. According to the WSJ: “The Federal Trade Commission is investigating whether Visa Inc.

and Mastercard Inc’s security tokens restrict debit-card routing competition on online payments. The FTC for the past few years has already been probing whether Visa and Mastercard block merchants from routing payments over other debit-card networks. The networks acknowledged an FTC probe in regulatory filings in recent years.

” While the investigation is ongoing, the probe from the FTC may mean changes are coming, which is a good sign for merchants.

By Josh Einis
Oct 20, 2022 00:00
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