MasterCard, Visa Enhancing Fraud Protection And Card Security

By Christine Kern, contributing writer

Merchants will now be able to deploy payment tokens to encrypt payment card numbers.

In separate announcements, MasterCard and Visa have said that they have pledge to enhance fraud protection and card security for its users, news that has retailers breathing a sigh of relief.

Visa has said that it will enable the use of tokens – mathematical code that encrypts information such as credit-card numbers – for the more than 110 merchants worldwide that use Visa Checkout online payment service, including Gap, Gymboree, Neiman Marcus, Orbitz, Pizza Hut and Staples .  The expansion of the technology is scheduled to occur in April.

“In 2015, Visa expects some of the largest e-commerce merchants to deploy Visa Token Service, using tokens to process consumer e-commerce purchases rather than actual payment account information,” Charlie Scharf, chief executive officer, Visa Inc. said in a  company statement.

First unveiled in October 2014, enabling mobile payments on select Apple devices using Visa accounts through the Apple Pay service, Visa Token Service will see a number of other leading device manufacturers and technology companies begin deployment in 2015 to deliver secure mobile payments through their phones, tablets and other connected devices.

Visa Token Service can also add a layer of security and prevention to online retail transactions by eliminating the need for e-retailers to store payment account information in order to easily fulfill eCommerce purchases. Visa anticipates that  some of the largest eCommerce merchants will deploy Visa Token Service in 2015, using tokens to process consumer eCommerce purchases rather than actual payment account information.

“Removing card account numbers from the processing and storage of payments represents one of the most innovative and promising technologies we’ve seen in decades,” said Scharf. “This, combined with chip card technology, advances in account holder authentication through analytics and biometrics, and more sophisticated risk monitoring, will allow Visa account holders to enjoy new, secure payment experiences.”

MasterCard has also pledge to further security and fraud prevention efforts, announcing that it will sink $20 million into a variety of initiatives to protect its issuers and retailers. The first, launching this spring, will be the implementation of the MasterCard Safety Net—an "independent layer of security on top of the tools and policies of financial institutions."

"The fact is whether you paid with cash for stuff or you're paying with a card or a phone or your biometric print, what you do want is safety and security in the transaction form," said MasterCard President and CEO Ajay Banga said. "You want to make sure you aren't getting something that comes at you which steals stuff that is yours."

The company also plans a pilot with Mountain View, Calif.-based First Tech Federal Credit Union to provide stronger authentication through a combination of biometrics, including facial and voice recognition and fingerprint matching, according to Computer Weekly.

Chris McWilton, president of North American Markets at MasterCard explained: “While progress is being made with the move to EMV and mobile payments, our continued investments reinforce the efforts we are taking to protect the payments system for cardholders, merchants and issuers. That’s at the heart of what our cardholders expect when they see our brand mark,” said McWilton.”