Money20/20 Panelists: Tokenization is Key to Driving ‘Connected Commerce’ (Oct. 27, 2015)
In the year since token technology made its debut with Apple Pay’s launch, it’s driven some significant new payments innovations, but we’ve only seen the tip of the iceberg of the technology’s full potential in enabling many future applications in “connected commerce” that will radically enrich and improve payments, according to payments industry executives speaking on several panels at Money20/20 this week in Las Vegas.
Tokenization—which replaces cardholder account data with a unique digital identifier—is the core technology enabling new mobile payments services, including Apple Pay, Android Pay and Samsung Pay, but the technology eventually will enable payments to become more flexible and secure in all types of environments, including online and at the POS and in conjunction with new biometric payments approaches. “It’s still very early in tokenization’s development cycle, but I see a future where tokens will enable different stages and levels of merchant transaction pricing [depending on their context],” said Arif Ahmed, U.S. Bank’s senior vice president of payments innovation, during a panel on the long-term implications of tokenization.
In related news, Visa announced yesterday that it’s integrating token technology into Visa Checkout, its e-commerce checkout service. Visa will apply token technology to consumer card data merchants store for repeat purchases, the company said. “I believe tokenization, in combination with EMV, will drive major innovations [across the payments spectrum] over the next few years,” said Bill Gajda, Visa’s senior vice president of innovation and strategic partnerships, during a Money20/20 panel on the role of payments as more objects are connected via the “Internet of Things.”
Yesterday at Money20/20 MasterCard also announced a new program it says will bring MasterCard payments to cars, fashion, wearables and other technology, with the support of commerce partners including General Motors Corp. “Tokenization is at the core of the next wave of payments innovation,” James Anderson, MasterCard’s executive vice president of emerging payments, told Paybefore. MasterCard last week said next year it will launch a fully tokenized checkout experience within MasterPass, using its Digital Enablement Service.
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