Tokenization: 6 Reasons The Card Industry Should Be Wary
VISA's new token service aims to provide consumers a simple, fraud-free digital payment experience. It's a worthy goal, but one that may prove to be more aspirational than functional.
If we have learned anything about payment technology over the past decade, it’s that there will always be a new technology or a new scheme that will be championed as a way to reduce the growing rise of payment card fraud. While we should be encouraged by progress on this front made by our payment industry cohorts, I believe the sheer size and complexity of the payment industry dictates that there will never be one silver bullet, one solution that will solve the payment security predicament we face.
One such example of this dilemma is the news about VISA’s newly launched tokenization effort, aptly called Visa Token Service, which aims to “offer consumers a broad range of simple digital payment options, while protecting their sensitive information from fraud.” While this is indeed a worthy goal, in practice, until harmonization is achieved, this may prove to be more aspirational than functional.
