PaymentsJournal
SUBSCRIBE
  • Analysts Coverage
  • Truth In Data
  • Podcasts
  • Videos
  • Industry Opinions
  • News
  • Resources
No Result
View All Result
PaymentsJournal
  • Analysts Coverage
  • Truth In Data
  • Podcasts
  • Videos
  • Industry Opinions
  • News
  • Resources
No Result
View All Result
PaymentsJournal
No Result
View All Result

What EMV Tokenization 2.0 Means for the Payments Industry

David Worthington by David Worthington
September 13, 2017
in Industry Opinions
0
Colored credit cards, debit card overdraft

Colored credit cards

16
SHARES
0
VIEWS
Share on FacebookShare on TwitterShare on LinkedIn

Technical body EMVCo launched version two of its EMV® Payment Tokenisation Specification – Technical Framework in September. The market has evolved rapidly since v1.0 was launched in 2014 to address the needs of digital payments including eCommerce, and minimize the fraud risk associated to an exposure of primary account numbers (PAN) – so v2.0 has been eagerly anticipated by the ecosystem.

Here’s a few things that stood out for me among the key updates and revisions.

Continuous development

As with all technology, the innovation curve is too steep for standardization to keep pace. This update therefore brings the framework in line with many of the developments that have happened over the past couple of years. It also addresses a range of feedback from live implementations of the technology to smooth the path for widespread deployment.

For example, EMVCo released an interim note in 2016 on its EMV Payment Account Reference (PAR) which enables merchants, acquirers and payment processors to link together a cardholder’s EMV payment token and PAN transactions. Version 2.0 of the tokenization specification clarifies this at a standards level and sets the rules for BIN controllers (such as an ISO IIN Card Issuer) to implement PAR for their BINs.

Greater clarity

One particularly positive development is the inclusion of a common set of definitions and terminology in the framework. This may sound simple, but it gives the ecosystem a way to communicate effectively and avoid confusion and delays. Players can now easily understand both the similarities and differences in supporting and implementing tokenization with each of the international and domestic payment schemes.

Elsewhere, EMVCo has clarified the roles, responsibilities and minimum requirements for entities establishing a token program. This will ensure the effective generation, issuance and full lifecycle management of payment tokens as markets develop. The document also outlines a range of new and existing token requestor types to clearly define who can request tokens and their associated notable characteristics.

This increased clarity not only enables greater collaboration and stability, it sets the stage for even more rapid evolution and brings confidence in tokenization as a fraud prevention technology.

New tokenization use cases

Since the launch of the original framework, the use cases for payment tokenization have expanded significantly to allow for multiple types of cardholder- and merchant-initiated transactions. The new framework therefore addresses new use cases for eCommerce, including:

  • eCommerce using a mobile/digital wallet – consumers can perform a tokenized transaction on an eCommerce site or in-app using their mobile/digital wallet.
  • Shared payment token – a Token Requestor can share the same payment token between multiple Token Users (e.g. merchants).

These additions can bring the fraud prevention of dynamic tokens to scenarios like recurring one-click-ordering and in-app payments.

Is this progress?

In a word, absolutely! While there is nothing necessarily revolutionary here, this update is both catching up with innovation and enabling it to continue happening in a sustainable, stable and secure way. We, as a developing ecosystem, now have a more complete reference manual to work from, which makes life easier for entities to clearly define their requirements when issuing an RFP, for example, and for technology providers to better understand what the market needs.

What next?

Work is ongoing. We are moving towards an end-game where all payments (and even all data!) are tokenized, so we need to get to a place where static tokens (like PANs) are no longer used and dynamic tokens are universal.

In our role as an EMVCo Technical Associate we look forward to continuing to support the future extension and clarification of the framework to enable further common understanding of the roles, concepts and use cases between all parties in the ecosystem.

*EMV® is a registered trademark in the U.S. and other countries and an unregistered trademark elsewhere. The EMV trademark is owned by EMVCo.

Tags: EMVRambusTokenization
16
SHARES
0
VIEWS
Share on FacebookShare on TwitterShare on LinkedIn

    Analyst Coverage, Payments Data, and News Delivered Daily

    Sign up for the PaymentsJournal Newsletter to get exclusive insight and data from Javelin Strategy & Research analysts and industry professionals.

    Must Reads

    cashless payments

    Exploring The Future of Cashless Payments

    June 8, 2023
    debit cards, Gen Z

    Debit Builds Consumer Loyalty Among Gen Z and Other Top Demographics

    June 7, 2023
    check fraud

    Check Fraud: The Threat is Real

    June 6, 2023
    smart banking

    Smart(er) Banking Requires More Than Just Tech

    June 5, 2023
    Google Wallet Expands Features

    Google Wallet Continues to Bet on Digital with Expanded Features

    June 2, 2023
    digital value

    How Embracing Digital Value Can Help Solve the B2C Payments Conundrum

    June 1, 2023
    instant payments, real-time payments, RTP

    Banks Developing Instant Payments Products in the U.S. Should Focus on Billers to Generate New Revenue Streams  

    May 31, 2023
    Digital Wallet Use Delivers on Convenience and Security

    Digital Wallet Use Delivers on Convenience and Security

    May 30, 2023

    Linkedin-in Twitter

    Advertise With Us | About Us | Terms of Use | Privacy Policy | Subscribe
    ©2023 PaymentsJournal.com

    • Analysts Coverage
    • Truth In Data
    • Podcasts
    • Videos
    Menu
    • Analysts Coverage
    • Truth In Data
    • Podcasts
    • Videos
    • Industry Opinions
    • Recent News
    • Resources
    Menu
    • Industry Opinions
    • Recent News
    • Resources
    • Analysts Coverage
    • Truth In Data
    • Podcasts
    • Industry Opinions
    • Faster Payments
    • News
    • Jobs
    • Events
    No Result
    View All Result