The growth of tokenized payment transactions will exceed one billion transactions in 2016.
Learn what these types of payments are and why they are growing so much.
Most frauds involving fraudulent use of payment cards occur in online commerce through copying or duplicating bank cards .
Payment card issuers are seeking to dominican republic email list strengthen security measures in e-commerce . In order to try to minimize the losses caused by the fraudulent use of their customers' bank cards.
Start of marked textSHARE IT! Do you know what tokenized payments are? Find out why they are growing rapidly.End of marked text
Limited liability of cardholders in fraud committed with bank cards
According to the OCU, in the event that the holder of a bank card is the victim of fraudulent use , the Payment Services Act limits the holder's liability, as the case may be:
Copy or duplicate of the card : since the user never loses possession of the card and has no way of knowing that the fraud is taking place, the bank must immediately return the full amount of the unauthorized transaction. In this case, the user is not responsible for any amount.
Theft or loss of the card : the user is liable for fraudulent use prior to the communication of the theft or loss. However, the amount is limited to a maximum of 50 euros, except in the case of gross negligence or fault.
What are tokenized payments?
Tokenization involves protecting the customer's payment card identification number , or PAN number. That is, converting the PAN number into a "token" each time a transaction is made.
Tokenization replaces sensitive payment method data with equivalent data, with non-sensitive symbolic values called “tokens.”
This way, if cybercriminals gain access to this data, they will not have access to the user's payment information. They will therefore not be able to use it to make purchases.
Systems that use tokenized payments also have the advantage of facilitating frictionless payment , made from a smartphone. This speeds up transactions by not having to use a physical card to make the payment .
More and more applications are using tokenized payments. Some of the best known are:
The codes are created by companies such as VISA and Mastercard. They create the “tokens” and provide them to mobile payment or e-commerce platforms, so that they can be used in transactions instead of the customer’s card data.
When a user enters their card details into a virtual wallet such as Google Pay, this platform requests the token from the token service provider ( TSP), which must first ask the customer's bank to verify the data .
When the data is verified, the code or “token” is generated and sent to the user's device.
Once this unique number is created, it is linked to the client's device in an irreversible and irreplaceable way. This way, every time the person makes a payment, the platform can authorize the operation by simply sharing this code. That is, without the need to expose the real data.
Why are tokenized payments growing rapidly?
Click-to-pay payment solutions and payments linked to the Internet of Things continue to grow. In fact, the growth of tokenized payment transactions will exceed one billion transactions by 2026 .
Visa is currently working to launch a new e-commerce payment service, “Click to Pay”, to facilitate a more convenient, agile and secure payment experience.
