Offer more ways to pay

Tokens help to simplify the purchasing experience for consumers by largely eliminating the need to enter and re-enter the account number when shopping on a smart phone, tablet or PC. Tokens can also help prevent fraud in e-commerce and m-commerce transactions by removing sensitive card account information from the payment process. Finally, merchants and digital payment providers can store payment tokens in place of payment account numbers, this further enhances payment security. 

Payment tokens can also include additional data fields to provide richer information about the transaction helping to improve transaction efficiency and security, and provide more information about the circumstances under which the transaction was initiated.  

Industry standard

Visa participated in the development of a cross-industry standard which provides a globally consistent approach to payment tokens. Elements of the standard include token creation and de-tokenization, new data fields in authorization, clearing and settlement, and token identification and verification services.

VisaNet processing

In April, Visa published mandatory changes by June 2014 (as outlined in April 2014 Technical Letter).

All U.S. VisaNet endpoints must be capable of recognizing and processing payment token-related data; a critical step in migration to payment token processing.

Visa Payment Token Service

Visa has developed a token service which is expected to be available to issuers in late 2014. The service will also help issuers manage the life cycle of payment tokens, as well as detokenize a Visa-created token when necessary. It can also support issuance of multiple tokens for a single account, each tied to a specific mobile device or service. The Visa token service is expected to be commercially available in late 2014. The service will align with the requirements outlined in the EMVCo specification.  

A virtual card is typically a one-time use account number that can be used for online purchases. A token can be used for multiple purchases, and can be restricted in how it is used with a specific merchant, device, transaction or category of transactions.  

Payment tokenization offers significant benefits to all stakeholder groups:

Issuers should see a decrease in e-commerce and m-commerce fraud and its associated costs (fraud losses, exception handling, customer service and card re-issuance).

Acquirers and processors should experience a reduced threat of sensitive cardholder data being usable by fraudsters if compromised.

Merchants and their service providers should experience a reduced threat of sensitive payment 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.

Tokens help to simplify the purchasing experience for consumers by largely eliminating the need to enter and re-enter the account number when shopping on a smart phone, tablet or PC.  

A Technical Letter issued in October 2013 included specifications for U.S. VisaNet endpoints to enable the minimum data fields. Clients with U.S. VisaNet endpoints are required to enable the minimum data fields that will be needed to ensure payment tokens can be recognized and processed seamlessly across the Visa ecosystem by June 2014. These mandatory modifications were part of the April 2014 VisaNet Business Enhancement Release and were aimed at ensuring all VisaNet endpoints - U.S. acquirer processors, acquirers, merchants, issuer processors and issuers that are directly connected to Visa - are keeping pace with industry developments in digital payments. 

With efforts accelerating in the U.S. marketplace to enable streamlined digital payments, these system modifications are an important first step to ensure all Visa clients - regardless of scale or capability - will be able to recognize payment tokens passing over their systems and process them effectively. Marketplace activity in the U.S. creates a need for these requirements to first be implemented in the U.S.; Visa is in the process of developing a roadmap for VisaNet processing support for tokens globally.  

This is a global initiative and the service is based on a proposed global standard. However, the initial implementation will be in the U.S. More information regarding Visa’s deployment in other countries as the rollout continues.