There are a number of tokenization methods available, but can the practice move forward without standardization? Rob Macmillan, VP Marketing, Digital Payments at Proxama — which recently launched a new digital enablement platform intended to simplify adoption of NFC for card issuers — thinks that establishing a standard is best. He spoke with PYMNTS about how doing so could expedite the development of new technologies in the future.
PYMNTS: Do you believe that tokenization should be standardized, with everyone using it the same way — and why?
RM: I definitely agree with that.
If we look at the evolution of the international payment schemes, most recently with EMV standardization across the world, it is evident that [standardization is needed] to achieve interoperability and ensure that systems talk to each other.
We’re quite aware that there are a number of standards for tokenization out there, but we certainly back the approach of EMVCo in particular. They’re establishing a common framework that ensures successful participation for all of the existing systems.
PYMNTS: Earlier this year, Proxama launched its new digital enablement platform intended to simplify card issuers’ adoption of NFC payments on HCE and tokenization technologies. How do you simplify the conversation with — and the solutions for — card issuing banks and processors who have so much to juggle?
RM: In building our digital enablement platform, our focus was to simplify the process of adopting these new technologies. Firstly, we looked to the international standards — so we followed the EMVCo standards of framework for tokenization; we also followed the scheme standards of Visa and MasterCard in the introduction of cloud-based payments. In doing so, we insured that our platform as it came to the issuer already supported what was going to be required in the future.
From a capabilities point of view, we also ensured that what we could do with end-to-end was put all the available components together in a platform, thus enabling the issuer to issue the necessary credentials and data onto a smartphone and process their transactions. On top of that, it looked at the integration that they’d need to do and simplified that as much as possible by having simple interfaces and MPIs, which would make the process of adopting that platform much easier.
With the deployments we’ve already done, the focus has been on making it easy to do things like card issuing, first of all, as well as to address mobile as that comes along.
PYMNTS: What is your perspective on the tokenization landscape today? Do you believe it’s ready for “prime time?”
RM: I do. There is clearly a need for tokenization as a general mechanism for protecting cardholder data. The security breaches that have happened in the past illustrate how important this is; the adoption of mobile payment mechanisms through Apple Pay and cloud-based payments have proven that out further.
On top of that, we now have global standards being established through EMVCo, so there’s an opportunity for people to implement solutions that they know are going to interoperate.
I think it’s fair to say that there is more work to be done. It’s no surprise, given the evolution of our industry, that things will continue to change; but now is definitely the time to get on board with tokenization.
PYMNTS: What should card issuers keep in mind when assessing and choosing from the several tokenization services that are available in the market today?
RM: There are a number of things to consider. Probably the starting point is to ensure that they have a clear understanding of the requirements regarding the purpose they need achieve.
Many of those issuers that are currently adopting tokenization are looking at implementation of mobile payment solutions, so they need to understand what are the requirements associated with them. But they also need to take a bit of a longer view and understand which requirements will best fit among the range of options that will later appear in the marketplace.
For example, at the moment, the adoption of Apple Pay has been based upon tokenization solutions provided by the schemes — indeed, that’s the only way to join Apple Pay. However, looking at the broader requirements, they may actually be able to control their own tokenization capability to support cloud-based payments; or perhaps eCommerce tokenization, or mCommerce payment, may mean that they have a different set of options. They should look, then, to see what options are in the market and which best fit their needs.
PYMNTS: What’s next for Proxama? What projects do you have in the works that you can talk about?
RM: We’ve already established our digital enablement platform, as you addressed, to support cloud-based payments for product schemes to the standard of Visa and MasterCard. We’re looking at extending that to also support capabilities into the new “X-Pay” market — the Apple Pays, the Samsung Pays…LG is looking to support a new payment mechanism, as well.
We’re also extending our own capabilities with value-added services. One of the things that we’ve observed is a big push for mobile payments helped by Apple Pay, but there is a common view that to get the adoption of those services going, we actually need to add capabilities to it to give people extra reasons to use the mobile payments that are out there — things like loyalty schemes and voucher schemes.
Engaging the consumer will definitely help drive people to use their mobile phones for payments.
VP Marketing, Digital Payments at Proxama
Rob is responsible for Product Marketing and Product Management for Payments Solutions in Proxama Group. His knowledge of card payment and NFC mobile management systems is applied to leading the product strategy and roadmap for the Group. Prior to being one of the first starters at Aconite, Rob delivered numerous business and technical consulting projects at PwC.