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Tokenisation to better secure digital payments: Visa

Nurdianah Md Nur | Dec. 18, 2015
Tokenisation will help fight digital payment fraud, says Joe Cunningham of Visa.

How visa tokenisation works
How tokenisation works at a glance. Click on image to enlarge.
Credit: Visa

Visa has developed the Visa Token Service, an interoperable platform based on the global token standard. It makes token issuance simple and cost-effective for issuers and third party digital payment services such as Apple Pay, Android Pay and Samsung Pay. Instead of issuers creating their own systems to issue and manage payment tokens and having to set up bilateral arrangements with digital payment providers, Visa Token Service can provide a common connection for both. We continue to expand the Visa Token Service. More than 2,300 financial institutions and banking partners are already participating in this.  International expansion is underway in APAC, allowing us to support third-party mobile wallets, bank-branded mobile payment solutions that leverage Host Card Emulation technology and other use cases around remote and proximity payments.

Do retailers/merchants in APAC understand the need for tokenisation?
Tokenisation offers significant benefits to all stakeholders groups in the e-commerce space. Issuers should see a decrease in e-commerce and m-commerce fraud and its associated costs. Acquirers, processors, merchants and their service providers should experience a reduced threat of sensitive cardholder data being usable by fraudsters if compromised. Merchants will also have a powerful tool that will allow them to develop innovative retail experiences without the burden of handling this sensitive payment account data. Most recently, we announced we have integrated the token service into Visa Checkout, our digital check out service used by merchants and consumers globally to make safe, easy payments online and in-app in just a few clicks. Visa Checkout is already making it easier for millions of consumers to pay with their cards online, on any device. Now consumers in other countries can experience the same simplicity and convenience when Visa Checkout becomes available in a total of 16 markets in 2015. In APAC, the markets include Australia, China, Hong Kong, Malaysia, New Zealand and Singapore.

The need for tokensation will take on an added urgency as mobile payments adoption in Southeast Asia continues to gather momentum. According to a Forrester report, "driving this growth is the surging smartphone penetration (local smartphone installed base to grow from 175 million units in 2015 to 230 million units by 2017), a booming market for digital content and favorable government policies, spurring an array of new players to enter the Southeast Asian mobile payments arena". According to Visa's 2015 Regional e-Commerce Monitor Survey, 57 percent of APAC respondents in the survey reported payment security as their primary concern. 

Are there any complexities that a retailer might face when it adopts tokenisation? How does Visa help overcome those challenges?
Visa is committed to working closely with our clients to ensure that adoption of tokenisation is as seamless as possible, such that they can offer this advanced security technology to their e-commerce customers as soon as possible. Visa is working closely with retailers to create an environment of partnership by promoting industry engagement and accountability around security. In addition, we want to maintain trust in Visa payments through retailer and consumer education as well as working closely with merchants to upgrade their in-store payment terminals.


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