The fact that Mastercard and Visa signed a reciprocal tokenization agreement was announced in a MasterCard blog and does not appear to even be mentioned on the Visa web site at all. The two largest payment networks in the world have agreed to partner, but it apparently isn’t worth a press release:
“This past summer, Mastercard started to tokenize Mastercard credentials into Masterpass, our flagship wallet service that can be customized by issuing partners for use by consumers anywhere they want to shop –in store, online and in app – using their smartphone, tablet or PC. The Masterpass vision is to support all forms of commerce to address the full range of merchant experiences and consumer needs. And as part of this vision, we created Masterpass as an open wallet enabling card-issuing banks and consumers to store their Mastercard-branded cards as well as those they have that are issued on other networks, including Visa.
To continue to drive the wider adoption of tokens – an effort supported by both our bank and merchant partners – we recently signed an agreement with Visa that will accelerate the adoption of tokens in Masterpass and Visa Checkout. The reciprocal tokenization agreement allows Visa to request tokenized Mastercard payment credentials from Mastercard for provisioning into Visa Checkout, and for Mastercard to request tokenized Visa credentials from Visa for provisioning into Masterpass.
By allowing each network’s respective wallet service to leverage the token solutions of the other network, this agreement will ensure that each network’s wallet solutions can continue to stay open – and can add the extra security of using tokens in place of real card numbers. We’ve seen a fantastic response to Masterpass from both banks and merchants alike, and see this agreement as another positive development in the product’s continued adoption.”
So now a Visa card can be added into Masterpass and a Mastercard added into Visa Checkout – it will be interesting to see how this is presented to the consumer. Perhaps a new neutral brand for eCommerce and mCommerce should be created so the networks can better compete with the mobile payment solutions from Apple, Google and Samsung.
This might prove to be a bigger deal for merchants that have a large database of cards on file that decide to launch a mobile wallet of their own. With this agreement they can deploy merchant-specific tokens to the wallet using a single TSP and network.
Overview by Tim Sloane, VP, Payments Innovation at Mercator Advisory Group
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