The mobile payment space is fast evolving. The arrival of tokenization is one such advancement which has made all of us feel a lot safer while transacting using cards. Tokenization is an alternative security technology that converts traditional card data, including the Primary Account Number (PAN), into a token. The token is a number whose only function is to point to the original card data, which is stored in a secure host called the “token vault.” Once the transaction is complete, the token is cancelled.
Tokenization adds another layer of security to all transactions. Visa and MasterCard have already introduced tokenization for major credit card companies. By doing this, it has solved many of the vulnerabilities that exist in the payments system. So what’s next on a hacker’s list? It might be PLCC.
The extra layer of security that major credit cards had wasn’t there in PLCC cards. This is why PLCC cannot be integrated with Apple Pay. If PLCC issuers do not adopt tokenization, newer payments systems like Android Pay will also not run with PLCC; it will have a negative impact on the revenues of PLCC issuers.
MasterCard’s new move in PLCC will change things rapidly. MasterCard has now become the first payment network to provide tokenization services to private label (store-branded) credit card issuers, enabling merchants to take advantage of the latest digital payment innovations. BJ’s Wholesale Club, Kohl’s and JCPenney will be among the first retailers to bring mobile payments to their private label cardholders later this year. The company also announced partnerships with some of the largest private label credit card issuers in the US, including Synchrony Financial and Citi Retail Services, to enable consumers to use their eligible credit cards within participating mobile payment and digital wallet services.
Tokenization support for private label issuers is made possible through the MasterCard Digital Enablement Service (MDES), which enables a connected device to be securely used for everyday shopping and payments. MDES supports contactless (NFC) payments with a mobile device at a physical point-of-sale, as well as from within a mobile app. Transactions are secured using industry-standard EMV cryptography and take full advantage of the most secure payments technology in the world.
“Thanks to our ongoing innovation and strategic partnerships, we are helping shape the future of how private label credit cards work in whichever digital wallet customers choose. It was recently announced that our retail partner, JCPenney, will be among the first to offer its private label credit cardholders the ability to checkout with Apple Pay later this year. We are committed to working with our retail partners, MasterCard, and key payments industry players to preserve the benefits of our private label credit cards and patented Dual Cards in third-party digital wallets.” said Margaret Keane, President and CEO of Synchrony Financial at a press release.
Samsung Pay which will also work on MST technology will support PLCC (private label credit cards) in cooperation with key partners like Synchrony Financial and First Data Corporation.
Since private label cards are often associated with special offers and discounts, it stands to reason that simplifying their use with new payments systems like Apple Pay, Samsung Pay and Android Pay could mean both wider adoption of mobile payments and greater incentive for consumers to use them.