Visa Token Service

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Visa Token Service

Visa recently announced 20 new partners to their token services. These new partners include PayPal, Adyen, and Worldpay to name a few. By joining Visa Token Services, the 20 new gateway and payment partners can now tokenize digital payments for their merchant and payment clients. With the expansion to these partners, merchants will be able to enjoy tokenization without having to do much of the heavy lifting themselves. Through integrations Visa Token Service manages tokenization on the merchant’s behalf. In this post, we will cover what merchants need to know about the Visa Token Service and how it can benefit them.

Visa Token Service

Visa initially announced Visa Token Service in September of 2014. The goal was to create a safe and seamless way to pay for ecommerce and mobile transactions. In this initial announcement Visa CEO, Charlie Scharf, said “When you make the payment environment safer, you open up a world of possibilities where commerce can take place in different forms and consumers can shop anywhere, on any device, with confidence. Visa Token Service is yet another example of where we have opened up our network to create meaningful solutions in the form of new standards, tools and services that can enable digital payment experiences that are both engaging and secure.” Visa Token Service was rolled out to U.S financial institutions and overseas in 2015.

Now that this service is expanding to more partners, it is important for merchants to understand how it works and how it protects customers and merchants alike.

How It Works

Visa Token Service is a new level of protection. The service takes sensitive information such as a cardholder’s 16-digit card number and replaces it with a unique digital identifier called a token. Allowing the payment to still happen without exposing any account details. Here are the steps of how this happens:

Step One – The customer starts a payment online, in-store or in-app. This is done through a token requestor. Since the launch in 2014, Visa has added 60 different token requestors that can range from mobile (Google Pay) and wearable (FitBit) manufactures, issuer wallets, online merchants, payment service providers and acquirers and more.

Step Two – The merchant sends the token to the acquirer as part of the authorization request.

Step Three – The acquirer sends to token to Visa’s networks to begin processing the transaction.

Step Four – Visa sends the token, along with card details to the issuing bank for authorization.

Step Five – The issuer either accepts or declines the transaction, and they send the response and token back to Visa.

Step Six – The token and payment authorization are routed back to the acquirer.

These six steps create a frictionless and secure environment for ecommerce and mobile payments.  

How It Protects You

Consumer Protection: By replacing the 16 – digit card number with a token, consumers do not have to share any personal or sensitive information with the merchant. This gives them extra trust and confidence in making purchases. Tokens can be limited to specific merchants, mobile devices or types of purchases which provides customers another form of security.

Merchant Protection: Visa Token Service allows merchants to shield themselves if a data breach was to occur. Because the merchants never received any card information when the transaction happened, no card information would be compromised.

Reduced Friction: Kamran Zaki from Adyen (a recent partner of Visa Token Service) commented on the reduced friction, “Adyen is excited to be the first acquirer in the payments ecosystem with in-market solutions to support and offer Visa Token Service to our global merchants. In addition to improving security, Visa network tokens through Adyen will allow our merchants with cards on file to reduce involuntary churn and improve authorization rates without any additional work on their part.”

Visa’s New Partners

Visa’s 20 new partners with Visa Token Service are : Adyen, AsiaPay Global, Braintree Payments,, Cherri Technologies, CyberSource, Elavon, Ezidebit, eWAY, FitPay, Giesecke & Devrient, PayPal, Payscout, Rambus, SafeCharge Payment Solutions, SecureCo, Square, Stripe, Worldpay and YellowPepper. These partners will allow their merchants to take advantage of all the benefits tokenization has to offer.

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