Digital Tokens – The new Holy grail of eTransactions


As the number of eTransactions keeps increasing in our daily financial world, the number of criminals trying to access the customers’ finances is also on the increase.

Yes, there have numerous tools released by Payment Giants to reduce the instances of fraudulent transactions. It is like a cat and mouse race, and when the tips favor the criminals, the shoppers might reduce their eTransactions.

The challenge for Payment Giants is the varied messaging systems, which at times do not talk to each other. Yes, diversity is good, as in case a messaging system is compromised, the risks will be restricted to that messaging system only.

The other part of the coin is oligopoly, which is preferred over Monopoly.

To raise the security barrier for eTransactions, the three major Card issuers i.e Visa, MasterCard and American Express have joined hands.

They have proposed Digital Tokens for online and mobile transactions. The broad guidelines have been finalized, and they are calling on other industry players to support their proposed framework for the new standard, which would be a Global Standard.

The main supporting argument is that the Digital Tokens would make life simpler and safer for customers shopping on a mobile phone, tablet or PC.

The proposed framework would see issuers, merchants and digital wallet providers able to request a token so that when an account holder initiates an online or mobile transaction, the token – and not the traditional card account number – would be used to process, authorize, clear and settle the payment.

The tokens can be customized basing on customer risk preferences i.e tokens could be restricted in how they are used with a specific merchant, device, transaction or category of transactions.

The new framework will be built around existing industry standards to keep the investment to a minimum and also ensure consistency around the world.




Over the coming weeks, the framework will also be presented to other partners and independent industry bodies, such as The Clearing House, PCI Security Standards Council and EMVCo, to align and further advance the standard.

This industry wise collaboration is similar to collaborations for the adoption of Magnetic Stripe, EMV or NFC


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