MasterCard doles out token service to store-branded cards, e-commerce merchants

The payments giant is extending tokenization support to private-label credit cards and e-commerce merchants in a bid to become the de-facto facilitator of mobile payments.


MasterCard is extending tokenization support to store-branded credit cards and e-commerce merchants in a bid to become the de-facto facilitator of mobile payments.

The payments giant said it will make tokenization available on all private-label credit cards, giving retailers the ability to accept mobile payments via Apple Pay, Android Pay, and just about any third-party payments app.

As for the card-on-file extension, MasterCard is making it possible for businesses to replace stored credit, debit and prepaid card account numbers with tokens. Beyond increasing security, MasterCard said stored tokens alleviate the need to update card information kept on file when the consumer's card number or its expiration date changes.

The concept of tokenization has been around several years, but it rose to prominence when Apple first announced Apple Pay last fall and placed tokenization in a starring role. It's seen as a critical security feature for safeguarding against data theft at the point-of-sale, as it replaces credit card account numbers with a randomly generated, one-time use numerical sequence.

MasterCard was on board as an early supporter of Apple Pay, and has since rolled out additional tokenization services as part of the MasterCard's Digital Enablement Service (MDES).

Announced just a day after Apple Pay, MDES is the engine powering MasterCard's digital payments ecosystem, and is a key component to both of today's announcements. In terms of tokens, MDES is used to route the randomized account numbers back to the actual personal account numbers, which are then forwarded it to the issuer for authorization. MDES already provides tokenization for credit and debit cards, prepaid and small business cards.

MasterCard's tokenization play for private-label cards comes on the heels of Apple opening up its own digital wallet to store cardholders. MasterCard named BJ's, Kohl's and JCPenney as the first retailers set to make use of the tokenization capability -- all three of which were also named by Apple during the reveal of iOS 9.