No payment card company in Korea is currently developing its own tokenization system, and that has some in the Korean retail and financial industries worried, Business Korea reported.
While Korean issuers Shinhan Card and BC Card can currently deliver a “somewhat similar” technology that creates virtual card numbers, most use MasterCard’s tokenization technology provide virtual card number services for overseas online payments, including KB Kookmin Card, NH Nonghyup Card, and Citibank.
That could put the Korean card business at a disadvantage, especially since Visa and MasterCard are currently heavily involved in tokenization, and their implementations are becoming the defacto standards that are strongly influencing formal international standards being developed by the PCI Security Standards Council and EMVCo.
Developing homegrown tokenization technology that’s compatible with those emerging standards “will guarantee more advanced security and efficiency than the existing method that creates virtual credit card numbers used by local credit card companies,” according to Business Korea. Compatible systems will also be more convenient than one-off payment methods using virtual credit card numbers.
MasterCard-compatible technology is also behind the tokenization in the Apple Pay mobile wallet, which has given tokenization a much higher profile.