American Express, MasterCard and Visa have presented their proposal for a global framework to improve the security and customer experience of online and mobile shopping using digital ‘tokens’.
According to US Census Bureau data, around 6% of all retail sales are now digital, up more than 200% since the first quarter of 2004.
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By GlobalDataThe three payments companies have suggested that a traditional account number is replaced with a digital ‘token’ for online payments. They suggest that this would add a layer of extra security and stop merchants from needing to store account numbers.
Jim McCarthy, global head of innovation and strategic partnerships at Visa, said: "For more than five decades, the payments industry has relied on standards to safely and consistently process payments.
"As more consumers make purchases with mobile phones, tablets and PCs, we are committed to showing industry leadership in the development of new standards that offer the same interoperability, reliability and security as traditional card payments."
Ed McLaughlin, chief emerging payments officer for MasterCard, said: "This continued transition from plastic cards to digital is all about providing consumers with the ability to easily and safely make a purchase.
"They would no longer need to store their actual card account number when shopping online or with a smart device; the token would serve as that stand-in."
Mike Matan, head of global network business, American Express, said: "By working together to form a common global standard for online and mobile shopping, we will be able to provide enhanced security, interoperability and consistency for all participants within the digital payments ecosystem.
"In addition, we will be able to drive the rapid adoption and expansion of digital payments, delivering innovative new products and services that will allow consumers to realize the full potential of digital commerce in today’s world."
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