Visa confirms April launch for tokens in EU, and 2015 for Australia

Credit card providers Visa and MasterCard have confirmed they will roll out their tokenisation technology in Australia at some point in 2015 while Visa said the service will launch in Europe by mid-April.

Visa Europe on Tuesday said banks will be able to able to use its new tokenisation service from mid-April, which lays the groundwork for mobile and contactless payments like Apple Pay.

The method substitutes the 16 digit primary account number on cards with a token — a series of numbers — that can be used to authorise a payment without exposing actual account details.

Visa points out that to prevent fraud, it can limit a token’s use to contactless payments, which would prevent it from being used to authorise an online payment. It would be an improvement on chip and PIN or EMV cards, which helped reduce fraud at the terminal but was less effective at preventing online fraud and indeed was seen as the reason for an increase in online fraud in markets EMV was launched in.

The token resides on a user’s device and can be revoked and replaced if a device is stolen or lost.

Visa Australia announced yesterday that the technology would be available for Australian banks to use at some stage in 2015.

Visa, MasterCard and American Express along with dozens of banks in the US have supported Apple Pay for some months, allowing owners of the iPhone 6 to make contactless payments via the device’s NFC chip in combination with the Touch ID fingerprint reader to authorise it.

Once Apple launches Apple Watch this April, owners will also be able to use the device to make contactless Pay payments.

Samsung is planning to enter the space too via its recent acquisition of payments startup LoopPay for the US market. Unlike Apple Pay, LoopPay’s system doesn’t require an NFC upgrade at card readers and instead uses its Magnetic Secure Transmission (MST), which also support many more devices than Apple’s current lineup. But some analysts have said MST will eventually be made redundant as banks move away from magnetic stripe technology.

MasterCard told Fairfax yesterday that its MasterCard Digital Enablement Service is available to Australian customers and that it expects take up to happen throughout 2015.

The tokenisation service validates the transaction and then maps out its path from the token to the original card number and onwards to the issuer for authorization.

The service is available to merchants with compatible contactless terminals or apps with of in-app purchases.

This article is brought to you by Enex TestLab, content directors for CSO Australia.


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