MANILA, Philippines - American Express, MasterCard and Visa are working on the framework for a new global standard that is designed to make online and mobile payments more secure and straightforward.
Under the proposal, consumers will no longer need to enter traditional account numbers when making a purchase. Instead they will use a digital payment “token†for transactions.
What is significant is the three credit card giants are working together on a joint proposal rather than being in competition. They are calling on other industry players to join them.
The new standard will be based on existing industry standards and made available to all payment networks and other payment participants, said the card giants.
Elements of the standard will include new data fields that provide more information about the transaction, which can help improve fraud detection and speed up the approval process.
In addition, the standard will also include methods to identify and verify a consumer before replacing the traditional card account number with a token.
And the standard promises to simplify the process for merchants for contactless, online or other transactions.
The new system would mean card issuers, merchants or digital wallet providers could request a token so that when an account holder initiates an online or mobile transaction, the token rather than traditional card account number would be used to handle the transaction in the same way card payments are processed today.
Tokens can be restricted to a specific merchant, device, transaction or category of transaction.