The proposed standard used to generate tokens would be based on existing industry standards and would be available to all payment networks and other payment participants.
Key elements of the proposed standard include new data fields to provide richer information about the transaction, which can help improve fraud detection and expedite the approval process; consistent methods to identify and verify a consumer before replacing the traditional card account number with a token; as well as a common standard designed to simplify the process for merchants for contactless, online or other transactions.
Once a standard is agreed to and implemented, issuers, merchants or digital wallet providers would be able to request a token so that when an account holder initiates an online or mobile transaction, the token -- and not the traditional card account number -- would be used to process, authorize, clear and settle the transaction in the same way traditional card payments are processed today. Tokens can be restricted in how they are used with a specific merchant, device, transaction or category of transactions.
The proposed framework has incorporated the input of many stakeholders, particularly card issuers and merchants. Over the coming weeks, the framework will also be presented to other partners and independent industry bodies, such as The Clearing House,
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