Brookfield-based financial services technology provider Fiserv Inc. recently started offering a mobile payment capability called tokenization to its debit and credit issuer clients.
Tokenization uses a “token” number instead of the customer account number during mobile and online payments to add another layer of security to the transaction. The token number can be changed for each transaction or it could change based on the device that’s used.
“That token, because it’s special use and can be tracked and identified, where is this coming from, it means that it cannot be hacked in the same way a debit card can,” said Dave Keenan, general manager of network solutions at Fiserv. “We enable the issuers to do that translating of the alias numbers of the tokens back to the original card number. We provide them the infrastructure…and we are partnering with MasterCard and Visa to do that.”
These tokenization capabilities are required for card companies that want to participate in the new Apple Pay service, which allows users to swipe their phone or watch to make a payment. Tokenization can also be used in other mobile wallet, near field communication and quick response code applications, and reduces fraud risk during digital transactions.
“It’s certainly not an exclusive thing for Apple Pay,” Keenan said. “Tokenization is an open standard, and I would suspect that because of the way that tokenization can protect consumers, merchants, buyers and sellers, I would believe that tokenization would become more mainstream.”
Fiserv is in the process of rolling out Visa Token Service and MasterCard Digital Enablement Service, which will be available to card issuers that use Fiserv processing. Fiserv’s Accel debit processing network will also support tokenization.
The company is building the tokenization capabilities into its existing card processor system, Keenan said, so it won’t take too long to implement. While no issuers have yet been approved for Apple Pay, Fiserv hopes its clients can be part of the first wave of issuers on the service.
As a surge of issuers implement tokenization and consumers sign up for Apple Pay and other mobile wallet services, Fiserv expects a bump in demand for its services, Keenan said.
“As mobile payment technology becomes more accessible and convenient, consumer adoption will accelerate,” said Kevin Gregoire, president of Fiserv’s financial institutions group. “Fiserv is equipping our clients to meet growing consumer demand for payments from their mobile device, whether they are paying a bill, paying another person or making a purchase. Our partnerships with Visa and MasterCard to support tokenization, and our planned support of tokenization through our own Accel network, are part of our overall commitment to bringing secure and simple digital payment solutions to our clients and their customers.”
