Category Archives: Amex

Key debates in payments tokenization – Cost & Control

In Payments, Tokenization has surfaced two key points of debate for financial institutions. The first has to do with bank partnerships with technology providers like Apple, Google, Samsung et al – and how these partnerships need to be equalized around the topic of cost and control. Though the fear of disintermediation isn’t new, concerns about costs, data sharing and customer privacy has received a disproportionate share of this internal debate. Following is a brief perspective on how this is further shaped within banks and the downstream impact to those who intend to wrap them. Continue reading

Dumb pipes and Wide moats: Networks and Tokens

For Apple Pay, tokenization is the process by which card information is protected and subsequently shielded from the merchant and other parties in the transaction flow – till it reaches an entity equipped to reverse the translation and submit the authorization for bank approval. With AP – this role is entirely owned by the card schemes, even though the specification put forth by EMVCo places no such stipulations and allows third party “Token Service Providers” to exist. Apple is said to have welcomed “non-card scheme TSP’s” to operate within Apple Pay for a couple of reasons – the ability to support non-payment tokens as well as a hedge against putting all its eggs in one basket. For network TSPs like V and MA – tokenization represents a real advantage that dis-incentivizes disruption, while opening their rails to far more potential than just payments. Continue reading

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