MasterCard is rolling out a tokenized checkout experience for its MasterPass platform to allow users to securely shop within mobile applications on any device or online, proving that tokens are increasingly a must-have for mobile payment solutions.

MasterCard is granting the mass request of many of its issuers to replace consumers’ personal account numbers for credit and debit cards with a secure token. As the “Buy with MasterPass” option is available on the apps and sites of more than 250,000 global merchants, the newly tokenized MasterPass wallet may evangelize many merchants and users to seek the same type of offering from other digital payment platforms.

“Since a random number is generated and the real credit card number is only referenced from a secure ‘vault,’ tokenization significantly reduces fraud risk for consumers and merchants alike and helps boost consumer confidence in mobile payments,” said Wilson Kerr, vice president of business development and sales at Unbound Commerce, Boston.

“MasterPass is making a big push in this area and we are building this payment option into an increasing number of mobile commerce sites and apps.”

Secure checkout experiences
MasterCard is now replacing personal account numbers for debit, credit, prepaid and commercial cards that consumers have stored within the MasterPass mobile platform with a 16-digit token. The new number will represent the existing personal account numbers found on front of cards.

Each user will receive a token unique to his or her bank-connected MasterPass wallet. Futhermore, the tokens are equipped with EMV-based security protection to make merchants and customers feel secure in their transactions.

Consumers have clamored for easier way to make purchases via digital channels with as little clicks as possible required for checkout, prompting MasterCard to develop its mobile wallet. However, security remains a top concern for issuers and customers alike, meaning that tokenization could be the comfort blanket to ease those woes.

The financial services marketer is leveraging its MasterCard Digital Enablement Service to power the tokenized checkout process.

This feature has previously been rolled out to merchants, but is reaching MasterCard’s consumer base for the first time.

In June, MasterCard launched tokenization for merchants using its Digital Enablement Services to help these businesses assure their customers of the safety of their mobile programs, as security has moved to the forefront of concerns regarding smartphone shopping (see story).

Boosting its platform
MasterCard has been teaming up with a slew of major brands to integrate MasterPass into their mobile payment options, especially for customers who may not be using Apple Pay or other iOS-friendly platforms.

Burger King’s recent decision to offer MasterCard’s MasterPass alongside PayPal’s payment options speaks to its desire to market to Android customers and suggests more quick service marketers will broaden their mobile payment partners rather than rely on a single platform (see story).

MasterPass’s tokenization will essentially result in a secure digital stream that occurs from users’ banks and connects to mobile or online banking services they are already familiar with.

The ability to cut down on fraud will also likely resonate well with customers.

“Since payment and address information can be instantly accessed by consumers across many retail sites, they can reduce the number of places they need to have this sensitive information stored,” Mr. Kerr said. “As the fraud burden shifts to merchants and consumer confidence grows, MasterPass is making smart moves in the online payments space.”

Final Take
Alex Samuely, staff writer on Mobile Commerce Daily, New York