Following Apple Pay’s successful use of tokens—one-time-use, unique codes rather than credit card numbers for payment transactions—Visa today announced that it will remove 16-digit account numbers for mobile and online payments across 2015. No specific date was given for the transition; instead, Visa suggests that tokens will begin to replace credit card numbers as the company’s partners get access to the Visa Token Service that rolled out alongside Apple Pay in October 2014.
“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 Charlie Scharf, chief executive officer, Visa Inc.
According to Visa, online transactions made with Visa Checkout will be tokenized this year, securing transactions for over 110 existing merchants. The Visa Token Service will also grow to include “other leading device manufacturers and technology companies” beyond Apple with Apply Pay, and will be supported in mobile payment apps released by Visa-partnered financial institutions in the United States, Asia Pacific, and Latin America.
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Shows a lot about how smart Apple was in implementing this system. Also a win for customers.
I guess there’s no patent involved in the use of tokens in this way?
A few things:
#1 I don’t think Apple invented tokenization.
#2 Whomever holds a patent can license their innovation to whomever they like.
#3 It would be near impossible to patent tokenization and then find retailers than can interface with your system if they didn’t license it. If they can’t accept tokens, then tokens represent $0 in sales, and the company has no incentive to accept tokens.
#4 Tokens appear to be an open-sourced technology within the credit community.