Tokenisation is the process of replacing a traditional card account number with a unique payment token that is restricted in how it can be used with a specific device, merchant, transaction type or channel. When using tokenisation, merchants and digital wallet operators do not need to store card account numbers; instead they are able to store payment tokens that can only be used for their designated purpose. The tokenisation process happens in the background in a manner that is expected to be invisible to the consumer.
EMVCo – which is collectively owned by American Express, Discover, JCB, MasterCard, UnionPay and Visa – will increase its focus from chip-based payments to include tokenisation. The new specification will complement the existing EMV® Specifications to deliver a cohesive global payments framework that supports an evolving range of secure payment methods, technologies and acceptance environments in both card-present and card-not-present ecosystems.
“The payments landscape is undergoing significant change, as new types of payments devices and experiences are developed to address the blurring of the physical and digital worlds,” explains Dave Meadon, current EMVCo Executive Committee Chair. “EMVCo’s continued work to define specifications for the payment industry will establish a reliable, interoperable and secure framework to enable ‘digital commerce’ to achieve its full potential.”
EMVCo will consider existing standards where appropriate to create the tokenisation specification. This will not only promote industry interoperability but also leverage current infrastructure established by the wider payments ecosystem. Key elements of EMVCo’s work include adding new data fields to provide richer industry information about the transaction, which will improve transaction efficiency and enhance the consumer and merchant payment experience by helping to prevent fraudulent card account use. EMVCo will also create a consistent approach to identify and verify the valid use of a token during payment processing including authorisation, capture, clearing and settlement.
Christina Hulka, current EMVCo Board of Managers Chair, adds: “EMVCo has developed and evolved global payment specifications that have supported fraud protection measures typically used in the card-present environment. Tokenisation is the next step in the evolution of payment specifications, consistent with EMVCo’s mission to facilitate secure and interoperable payments globally. We recognise that applying EMVCo’s expertise in identifying and implementing a common infrastructure in this area will make online and mobile transactions simpler and safer for all payment stakeholders.”
EMVCo’s announcement to advance the tokenisation specifications follows the joint communication from MasterCard, Visa and American Express which proposed an initial framework for industry collaboration to standardise payment tokenisation. EMVCo will now build on this framework with collective input from all its members and the industry as a whole.
