Visa (NYSE:V), MasterCard (NYSE:MA) and American Express (NYSE:AXP) today introduced a proposed framework for a new global standard to enhance the security of digital payments and simplify the purchasing experience when shopping on a mobile phone, tablet, personal computer or other smart device.
According to an August 2013 report from the U.S. Census Bureau, roughly six percent of all retail sales today are conducted digitally, up nearly 200 percent since the first quarter of 2004. As the number of digital transactions has increased, so has consumer demand for increased protection of their payment information. A host of industry activities, led by issuing and acquiring financial institutions, have already been introduced to help streamline and further secure payments in digital channels.
Aligned with these initiatives, the proposed standard would meet this consumer demand and allow the traditional account number to be replaced with a digital payment “token” for online and mobile transactions. With a token, consumers will no longer be required to enter an actual account number when shopping online or on a smart device. Tokens provide an additional layer of security and eliminate the need for merchants, digital wallet operators or others to store account numbers.
To ensure consistency across the globe, the proposed standard used to generate tokens would be based on existing industry standards and would be available to all payment networks and other payment participants. Key elements of the proposed standard include:
- New data fields to provide richer information about the transaction, which can help improve fraud detection and expedite the approval process
- Consistent methods to identify and verify a consumer before replacing the traditional card account number with a token
- A common standard designed to simplify the process for merchants for contactless, online or other transactions
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV