Visa plans to roll out an additional layer of security for mobile digital payments called tokenization in Australia later this year, the credit card company has revealed.
Tokenisation replaces the 16 digit card account number with a unique series of numbers called a “token” that can be used for card payments in the digital world, without exposing a cardholder’s more sensitive account information.
Visa didn’t give a specific date for the deployment, but said it’s working with bank and merchant partners to roll out the service by the end of the year.
Australia is the second country where Visa is bringing tokenization. The security feature was announced in the US in September 2014 is currently up and running there.
The company said the goal of tokenization is to make customers more comfortable with the security of mobile payments.
“We expect the smartphone to be at the centre of the Australian payment experience this year, both in-store and online, and the challenge for the industry is to be ready,” said Stephen Karpin, group country manager for Visa in Australia, New Zealand and South Pacific.
“Tokenisation will not only accelerate the move to mobile payments in Australia, but also provide a secure foundation for previously unimagined ways to pay. In the future, any Internet-connected device could become a secure way to make payments.”
Visa expects this year to be the “tipping point” for mobile payments in Australia, following mass adoption last year of contactless payments, he said.
A white paper by UMR Strategic commissioned by Visa found that seven in 10 Australians own a smartphone and more than half are interested in making payments with their mobile device. However, 46 per cent have stopped a purchase when shopping online because they didn’t trust a merchant with their card details.
In addition, nearly nine out of 10 Australian merchants surveyed said keeping customer credit card details secure is a high business priority, and 84 per cent said an additional layer of security like tokenization would be a positive step.
The Visa study, conducted in November and December 2014, surveyed 1000 consumers and more than 200 merchants in Australia.