The card scheme-owned EMVCo standards body is beginning work on specifications for the use of digital tokens - rather than account numbers - for online and mobile transactions.
Tokenisation replaces a traditional card account number with a unique payment token that is restricted in how it can be used with a specific device, merchant, transaction type or channel. When using tokenisation, merchants and digital wallet operators do not need to store card account numbers; instead they store tokens that can only be used for their designated purpose.
The technique was first proposed by Visa, MasterCard and American Express in October when the card giants argued that it would make life simpler and safer for customers shopping on a mobile phone, tablet or PC.
EMVCo - which is owned by the three and Discover, JCB and UnionPay - will now hammer out the specifications, which will complement the existing EMV rules for a "cohesive global payments framework".
Dave Meadon, executive committee chair, EMVCo, says: "The payments landscape is undergoing significant change, as new types of payments devices and experiences are developed to address the blurring of the physical and digital worlds. 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."
The body says that it will consider existing standards to promote industry interoperability and tap current infrastructure established by the wider payments ecosystem.
EMVCo is planning new data fields to improve transaction efficiency and prevent fraudulent card account use. It will also create a consistent approach to identify and verify the valid use of a token during payment processing including authorisation, capture, clearing and settlement.
Industry stakeholders are being invited to contribute to the process through the EMVCo associate programme.