The need to simplify tokenization for mobile payments

This entry was posted on Tuesday, January 17th, 2017.

André Stoorvogel, Director, Product Marketing at Rambus, describes the increasing challenges associated with managing tokenization activity. As Stoorvogel notes in a blog post, banks around the world are working to develop, launch and expand mobile payments services offered to customers.

Numerous issuers, say Stoorvogel, already support the ‘OEM Pays’ – Apple Pay, Android Pay and Samsung Pay – and many more are likely to follow as the various ‘Pays’ ramp up across the globe. As part of this process, banks are working closely with payment schemes to integrate their tokenization services. The schemes, explains Stoorvogel, manage tokenization on behalf of the OEM Pays, allowing banks to connect to mobile payment services.

“There are now millions of digital cards deployed in OEM Pay wallets, with hundreds of thousands of payment tokens created and processed via the schemes partners,” he writes. “As the mobile payments ecosystem expands, managing tokenization activity is becoming increasingly complex and time-consuming. Banks are seeing themselves integrate with a growing number of third parties. Across a bank’s portfolio of accounts, it might issue cards across multiple payment schemes and issue digital cards to a range of OEM Pay wallets.”

This, says Stoorvogel, requires connections with a number of the payment schemes’ tokenization services, each with its own individual requirements, specifications and interfaces. Further complicating matters is the fact that banks are required to update their systems in line with routine specification updates issued by the global technical body and payment schemes.

“With these individual connections to third parties, we are seeing a fragmented internal tokenization system develop that does not allow banks to gain an overall view of tokenization activity,” he continues. “Banks therefore need a solution that not only simplifies the increasing complexity of their current tokenization activity, but that can also be adapted and expanded to meet future tokenization requirements as this relatively new ecosystem develops.”

According to Stoorvogel, Rambus Token Gateway can help address the above-mentioned challenges by allowing banks to more easily manage tokenization activity for ‘OEM Pay’ mobile wallets with a single software platform.

“The Token Gateway simplifies and consolidates integration with the multiple token service providers (TSPs) operated by third-parties, such as international and domestic payment schemes,” he explains.

Token Gateway Multiple Interfaces diagram

“Moreover, Rambus constantly aligns its Token Gateway with the latest credit and debit schemes. This helps avoid the complex and time consuming process of monitoring specification updates from the schemes and manually managing the update process – making the tokenization lifecycle management significantly easier and cheaper.”

The Token Gateway, says Stoorvogel, also allows issuers to tailor the solution to their specific needs.

“In addition to a lifecycle management module, which is fundamental to the platform, banks can choose from various optional modules. For example, a card asset module facilitates the personalization and branding of digital cards, while a token vault mirror is available to maintain a log of tokenized data in-house. This permits banks to check a transaction without having to contact the relevant scheme TSP.”

Interested in learning more? You can check out our ebook on the subject here:

Token Gateway