News

EMVCo to develop tokenization spec

January 16, 2014

EMVCo has announced that it will expand its scope of work from chip-based payments to include tokenization. This will allow the global technical body to develop a standardized tokenization specification that will help provide a consistent, secure and interoperable environment for digital payments transacted with a mobile handset, tablet, personal computer or other smart device, the organization said in a news release.

Tokenization is the process of replacing a traditional card account number with a unique payment token whose use is restricted with regard to a specific device, merchant, transaction type or channel. With tokenization, merchants and digital wallet operators do not store account numbers; instead they store payment tokens that can be used only for the designated transaction.

The new specification will complement existing EMV specs to deliver a cohesive global payments framework that supports an evolving range of secure payment methods, technologies and acceptance environments in both card-present and card-not-present ecosystems, EMVCo said.

Elements of the project include adding new data fields to provide richer industry information about the transaction, which will improve transaction efficiency and help prevent fraudulent account use. EMVCo will also create a consistent approach to identify and verify the valid use of a token during payment processing — including authorization, capture, clearing and settlement.

"EMVCo's continued work to define specifications for the payment industry will establish a reliable, interoperable and secure framework to enable 'digital commerce' to achieve its full potential," said EMVCo executive committee chair Dave Meadon.

Interested stakeholders can engage with EMVCo on tokenization specification via the Associates Program, an initiative that allows them to contribute to the activities of the technical body.

Read more about EMV.