1. Akshay Masand's Avatar


    Visa, the international payment network, recently announced that it would extend its network tokenization service which is one of the foundational technologies behind Apple pay, to Europe starting mid-April. The announcement signals that the first overseas launch of Apple Pay may be around the corner. According to Visa Europe executive, Sandra Alzetta;

    We believe that 2015 will be the year that mobile payments will be in the hands of consumers across Europe. Tokenization is one of the most important technologies to emerge in digital payments and has the potential to start a whole new chapter in the kinds of products that are developed.
    For those of you who didnít know, tokenization is the new technology which substitutes a new, relatively meaningless identifier in the place of a consumerís actual account information. The concept as a whole isnít new for payments but the launch of network-level tokenization with Apple Pay brought the idea into the brick and mortar world. Previously, credit card tokenization was traditionally an online-only affair and token vaults, databases that map tokens to credit card numbers, were maintained by payment gateways.

    The Cupertino California company worked directly with several credit card networks including American Express and Visa to move tokenization to their side of the chain. During transactions made through Apple Pay, tokens are translated into credit card numbers by the payment network which makes it so only the consumerís bank and the payment network have information about both the person and the transaction. Along with the additional privacy benefits, network-level tokenization provides several security improvements. There is seemingly no risk of credit card numbers being stolen by breaching computer systems at merchants and furthermore, tokens can easily be revoked and re-issued in the event of a lost device without altering the customerís account number.

    Although network-level tokenization is now a part of the EMV payment specification, Apple was the first mobile payment provider to embrace it and help bring its application to more usable situations. American Express and MasterCard remain behind the curve at the moment and have yet to announce similar rollouts in Europe. With Visa making the move, the others are likely to follow in Visaís footsteps.

    Source: EMVCO via AppleInsider

    Twitter: @AkshayMasand
    2015-02-25 08:18 AM
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