Mobile phone payments will be safer with new tokenisation technology

Tokenisation to allow Europe to join mobile payment revolution

Visa Europe is to launch what it calls a tokenisation service providing better protection for mobile payment solutions.

The technique, substituting payment account information from a payment card with a series of numbers, has been widely considered one of the best data protection and fraud prevention methods available. It prevents sensitive data theft as the token is submitted in every transaction instead of the actual bank account details.

Customised for the European market, the technique could possibly pave the way for further use of smartphone-based technologies such as Apple Pay.

“We believe that 2015 will be the year that mobile payments will be in the hands of consumers across Europe,” said Visa Europe’s executive director Sandra Alzetta. “Tokenisation is one of the most important technologies to emerge in digital payments and has the potential to start a whole new chapter in the kinds of products that are developed."

The firm said the service will be available to selected banks as early as April this year.

The service, Visa Europe said, will allow financial institutions to control the environments where the token can be used. For example, a token set up only for contactless payments cannot be used to make an on-line purchase. Additionally, if a mobile device is lost or stolen, a token can be easily and promptly disabled.

Similar security services  from Visa Inc, the former parent of Visa Europe, and rival card issuers MasterCard and American Express, have been key to the success of Apple Pay since it was introduced in the United States last year, according to industry experts.

Apple Pay allows iPhone users to store their credit card details on their phones and conveniently pay at the tap of a button.

In its first three months, more than $2 out of every $3 which US consumers spent using 'contactless' systems at the three major credit card networks was done via Apple Pay, the company said last month.

Visa Europe's move is one of several new services the London-based credit card giant is unveiling as it battles to retain its role as a middleman connecting banks and consumers in a fast-moving payments landscape being shaken up by major technology firms including Apple, Google and eBay's PayPal, as well as scores of ambitious start-ups.

These include a way for card customers to send money overseas to other Visa users via their social media profiles on sites such as Facebook, WhatsApp, Twitter or LinkedIn.

Steve Perry, Visa Europe's chief digital officer, said in an interview his association's plan for secure credit card data transmission parallels what Visa Inc offers in the United States. But he declined to comment on whether Apple Pay had agreed to use his organisation's version in European markets.

"Apple and Visa (Inc) have an agreement around what has happened," Perry said. "I am as excited as anyone, but we have to wait," he said. The Visa Europe executive referred further questions to Apple.

An Apple spokesman was not immediately available to comment on any international expansion plans it might have.

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