Retail Groups Call for Open Tokenization Standards (Aug. 4, 2014)
U.S. merchant groups have banded together to call for open standards for tokenized payments, to be managed by an independent body. Tokenization increases payments security by replacing the exchange of actual card numbers between online and mobile shoppers and merchants with a proxy, or “token,” that can be used only with a specific device, merchant, transaction type or channel.
So far, the major payments networks have taken the reins in standardizing the technology. In March, EMVCo—a partnership between American Express, Discover, MasterCard and Visa—released its own tokenization standards and invited payments industry participants to provide feedback. Visa is expected to incorporate tokenization as part of its new cloud payments suite this fall, and the other networks are expected to follow suit soon after.
Last week, however, a number of merchant groups, including the National Retail Federation, National Association of Convenience Stores and National Restaurant Association, jointly called for a set of standards to be managed by an independent body, such as the International Organization for Standardization (ISO) or the American National Standards Institute (ANSI).
“In order for the full benefits of tokenization technology to be realized … the standards for this technology must be created on an open platform that enables all technology providers to compete equally,” the merchant groups said in a release. An open standardization process, the groups said, “will result in a final standards product appropriate for other aspects of U.S. commerce beyond just payments, and will be more easily and efficiently integrated into all hardware and software business environments.”
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