14 DAY TRIAL // Card issuer and payment processing network American Express launched a new service on Monday, designed to replace card numbers with tokens that can be stored by merchants instead of the payment information.
The measure is intended to reduce the fraud risk because the unique tokens can be assigned to work with specific online vendors, transaction types or payment devices.
In case they fall into the wrong hands, such as crooks, there are limited options cashing out with them, as opposed to the traditional payment option with card numbers.
The American Express Token Service allows customers to conduct financial transactions online, in a mobile app or in a brick-and-mortar location via NFC (near field communication) devices, which means that payment activity will not change for the card holder; the service is addressed to card-issuing partners, processors, acquirers and merchants.
However, online transactions and mobile payments, which have recorded significant popularity, will become safer for the end user.
One advantage provided by tokens is that in case of compromise, the bank does not have to re-issue the card, only a new token, and revoke the old one, and the customer may not even be aware of the modification.
The service from American Express is based on EMVCo’s Payment Tokenization Specification and Technical Framework that was published in March, this year.
At the moment, the service is available in the US and it is expected to be expanded in other countries starting next year.