MasterCard announced it will offer tokenization services to merchants with app, eCommerce, and recurring billing card-on-file programs, further protecting consumers and increasing convenience when storing MasterCard cards in merchant databases. By expanding its Digital Enablement Services (MDES) to serve merchants’ needs, MasterCard continues to lead the industry in securing cardholder credentials – no matter where they are stored.
To speed and simplify the purchase process in apps and online, as well as for subscription-based and recurring payments like streaming music and video services, club dues, and utility bills, consumers have allowed thousands of merchants to store billions of credit and debit card numbers on their behalf. According to MasterCard Advisors, a typical consumer may have their card number stored in five or more locations.
In addition to the inherent security risks in the storage of card numbers, when a card account number changes, consumers are faced with the daunting task of updating payment information across all of these locations. This typically requires them to remember where their card has been stored, as well as the username and password they created when they stored it. If they are unsuccessful in changing the card number, transactions will fail – resulting in potential interruption in services, lower customer satisfaction and lost sales for the merchant.
The new MasterCard program will enable merchants to harness the power of MDES to increase security and reduce declines for merchants that store card numbers. Through MDES, MasterCard will enable the card issuing banks to replace MasterCard credit, debit and prepaid card account numbers with a secure “token”: a new 16-digit number that represents the existing card number on the front of a payment card. The tokens will be unique to each merchant and carry extra security protection that will prevent improper usage at any other location, providing additional security and peace of mind for consumers and merchants alike.
The MDES program was designed to be fully compatible with existing acquirer and payment service provider (PSP) “local” token and encryption solutions, while greatly enhancing the overall network security and consumer convenience. Beyond enabling greater security, when a consumer’s card number or its expiration date changes, the tokens stored with all of their various merchants do not have to be updated, allowing for seamless, ongoing payments.
“Merchants continue to innovate in many different and compelling ways for consumers to buy from them, including in app, eCommerce, recurring and subscription-based payment environments. These new experiences all involve storing card numbers,” said Ed McLaughlin, chief emerging payments officer, MasterCard. “We are very excited to announce the extension of our industry-leading MDES program to make all of these merchant shopping environments more secure and convenient for their customers using MasterCard tokens, seamlessly enhancing the systems merchants and acquirers already have in place, and eliminating a significant ‘hassle factor’ for consumers when card numbers change.”
Since the announcement of MDES in 2013, millions of MasterCard accounts have been tokenized for use in popular digital wallet services. MDES currently provides tokenization services for credit, debit, co-brand, prepaid and small business cards. Private label tokenization, announced earlier today, will begin in the third quarter of this year. Tokenization services for app, eCommerce, and recurring billing card-on-file programs will be available to U.S. and Canadian merchants later this year and expand globally across all MDES-enabled markets.