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Beyond the Transaction: Every Transaction Has a Story

Accelerating the Adoption of Tokens to Benefit Banks, Merchants and Consumers

At Mastercard, we’re working to ensure that every one of our accounts is as digital as the people using them. And every day, more and more people are using connected devices to pay for things, with some experts predicting digital payment adoption could represent 20-30% of consumer payments by 2020. Core to this adoption is the reality that it’s not just laptops, tablets and phones being used to make payments; rather, you’re seeing things like wearables and IOT devices – including some household appliances like refrigerators – becoming payment devices as well. Flickr Photo: Masterpass in transit

But what threads these and other recent digital payment innovations together is the digitization and tokenization of card credentials.

Back in October of 2014, Mastercard announced the launch of our tokenization service, MDES. Since then, demand from our customers has been extremely strong – with almost 700 issuers around the globe now connected to MDES. And with these digitized and tokenized card credentials now available to us, our banks and merchants, Mastercard is designing rich, innovative, compelling and secure ways to pay across all channels and devices, redefining commerce globally.

This past summer, Mastercard started to tokenize Mastercard credentials into Masterpass, our flagship wallet service that can be customized by issuing partners for use by consumers anywhere they want to shop –in store, online and in app – using their smartphone, tablet or PC. The Masterpass vision is to support all forms of commerce to address the full range of merchant experiences and consumer needs. And as part of this vision, we created Masterpass as an open wallet enabling card-issuing banks and consumers to store their Mastercard-branded cards as well as those they have that are issued on other networks, including Visa.

To continue to drive the wider adoption of tokens – an effort supported by both our bank and merchant partners – we recently signed an agreement with Visa that will accelerate the adoption of tokens in Masterpass and Visa Checkout. The reciprocal tokenization agreement allows Visa to request tokenized Mastercard payment credentials from Mastercard for provisioning into Visa Checkout, and for Mastercard to request tokenized Visa credentials from Visa for provisioning into Masterpass.

By allowing each network’s respective wallet service to leverage the token solutions of the other network, this agreement will ensure that each network’s wallet solutions can continue to stay open – and can add the extra security of using tokens in place of real card numbers. We’ve seen a fantastic response to Masterpass from both banks and merchants alike, and see this agreement as another positive development in the product’s continued adoption.