Could Tokenization Be the Future of Payment Fraud Prevention? The Boston Fed Thinks So. Treasury Insider (09/25/14) Kennedy, Lindsey Payment tokenization will be a key weapon in the fight to prevent fraud, according to a new study from the Federal Reserve Bank of Boston and the Mobile Payments Industry Workgroup (MPIW). The Boston Feds Marianne Crowe says mobile payments security has been a significant obstacle to broad acceptance of certain mobile and digital payment solutions. With the recent introductions of new platforms that use tokenization technologies, including Apple Pay, we are even more convinced of the need to evaluate the optimal approach to tokenization and determine how the payments industry can better coordinate efforts to protect consumers and businesses alike, she says. The Boston Feds Susan Pandy cites interoperable and open standards as an issue surrounding tokenization that has come to the fore. However, the Federal Reserve points to a spate of conflicting tokenization models and inconsistent terminology as additional barriers to adoption. The MPIW says it will establish a new tokenization subgroup to help resolve these issues, focusing on existing models, the relative benefits of static and dynamic tokens, risk assurance levels, preventing creation of fraudulent tokens, and matters concerning infrastructure, interoperability, and consumer usability.
Posted on: Fri, 26 Sep 2014 17:25:03 +0000