Visa announced today the commercial expansion of its Visa Token Service for “credential-on-file token requestors.” This expansion involves adding 20 acquirer gateway and technology partners as token requestors — including the likes of PayPal, Worldpay and Adyen — that can now, or soon will be able to, tokenize credential-on-file digital payments for their merchant and payment clients.
The appeal to retailers, Visa’s Andre Machicao, SVP of CyberSource and Authorize.Net, told Karen Webster, is that merchants can take advantage of the benefits of network tokens without having to do any direct integration or the heavy lift associated with mapping their current payment tokens to network tokens. Visa Token Service enables that token management on behalf of the merchant through the integrations to these new token requestors.
The Visa announcement represents a move toward “a full-blown token ecosystem,” William Levaggi, Visa VP of Digital Products, told Webster during the PYMNTS interview in advance of the announcement.
“With the scale” of this move, the growth of tokenized transactions “is moving very fast,” he said.
Network tokens offer merchants an appealing solution to boosting the security of transactions while also helping merchants manage the account credentialing that is now the reality of multichannel retail payments.
As Levaggi said, a “network token provides an end-to-end tokenized transaction.”
It’s doubtful that PYMNTS readers need a refresher on tokens, but it never hurts to offer one, or to provide a quick status update on the larger token ecosystem.
Imagine a shopper using a digital wallet for a retail purchase. Instead of transmitting that consumer’s 16-digit credit card number, the payment terminal requests a token from that person’s mobile device. Once the device has sent one, the terminal must validate the token to ensure that it’s genuine. The token is used in conjunction with a cryptogram — that is, a value that is generated anew with each transaction, like a dynamic CVV code.
As PYMNTS coverage has noted, network tokens provide even more benefit. For instance, imagine a customer who regularly uses Uber on their commute but loses their credit card or phone. If Uber doesn’t use network tokens that can immediately reissue and provision the card, then the customer would have to call the bank, get the card re-issued and go into the Uber app to update their payment credentials.
Network tokens also offer the promise of brand protection by decreasing the likelihood of a data breach.
“If companies compromise in that context, you have the potential of significant brand damage to those merchants,” said Machicao.
The ideal? Perhaps each consumer has five or six different tokens that are not linked to each other — a protection against hacking.
Enough of the lesson.
Visa’s 20 new partners will help scale tokenization, given that they have thousands of merchant clients themselves. Partners engaging in the Visa Token Service are as follows: Adyen, AsiaPay Global, Braintree Payments, Checkout.com, Cherri Technologies, CyberSource, Elavon, Ezidebit, eWAY, FitPay, Giesecke & Devrient, PayPal, Payscout, Rambus, SafeCharge Payment Solutions, SecureCo, Square, Stripe, Worldpay and YellowPepper.
Having those partners working with Visa on tokens will serve to give merchants a more detailed picture of how shoppers buy and pay. The tokens, combined with the scale of this new Visa offering, give merchants the ability to more easily connect and associate consumer transactions across different channels, Levaggi said. Despite significant advances in the digital eCommerce and marketing ecosystem, merchants still face challenges in connecting all those different dots from different channels used by consumers.
Consumers, too, receive a big benefit — not having to be recredentialed across all the places where they have stored cards on file, thanks to the scope, scale and technology behind this new Visa offering.
Tokens are here to stay, offering security and reduced transactional friction. Now the technology seems ready to scale and evolve.