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Amex Introduces Tokens for Mobile Payment Security

[Monday, December 1st, 2014]

Businesses, credit card issuers, merchants, and payment processors will be able to provide consumers with a safer online and mobile payments experience, with the launch of the American Express Token Service.

The service replaces customers’ credit, prepaid, or debit card account numbers with unique “tokens” which are used to complete transactions using Near-Field Communication (NFC) technology. This is the technology behind Apple Pay and other mobile payment systems that are increasingly popular with consumers.

Prepaid cards and debit cards are especially vulnerable to fraudulent activity, and American Express prepaid cards will be able to take advantage of this token technology, keeping consumers safe from theft of their account numbers. Credit cards aren’t as vulnerable, because they generally have safeguards in place like zero liability for fraud, which prepaid cards do not.

The increasing popularity and availability of mobile and cloud-based payments has been a cause of worry for some people, even as others embrace the added freedom and ability to pay by phone, without carrying a wallet. Merchants have to find a balance between offering their customers the convenience of mobile payments and making sure their payment methods are secure. American Express Token Service offers one way to do that.

Information isn’t stored

Consumers are sometimes fearful that when they use their credit, debit, or prepaid cards at a retail store, the information is somehow kept in the merchant’s system. With American Express Tokens, account numbers and other sensitive information is never stored in a retailer’s payment system offering greater peace of mind to consumers when they are shopping using any type of American Express card.

Merchants have to sign up for Token Service which includes features like:

·         A token vault that stores tokens and maps them to card account numbers.

·         The capability to issue tokens.

·         Management services that allow merchants to create, suspend, resume or delete tokens.

·         Fraud and risk management services like authorization and payment data validation capability.

The service is not yet available internationally, but it is available in the United States and will begin am overseas rollout sometime in 2015.

Paul Fabara, president of global banking and global network business at American Express, said, “We believe our payments network is a tremendous asset to American Express – one that will allow us to offer our customers new features and technologies to meet their evolving spending needs.”

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