Magazine article Independent Banker

Tokenization, the New Magic Bullet?

Magazine article Independent Banker

Tokenization, the New Magic Bullet?

Article excerpt

Payments

While the arrival of EMV chip technology in the United States has long been heralded as the second coming in card payment security, it's not quite the magic bullet we'd all been hoping for. Liang Han executive vice president of ICBA Bancard, ICBA's electronic payments services corporation, explains that these security chips are very effective at mitigating fraud at the point of sale, but says that the technology does little to curb card-notpresent fraud.

Han points to the United Kingdom and Europe where chip technology has existed for more than a decade. "EMV has been crucial in stemming the tide of card fraud at brick-and-mortar locations, but as commerce has moved to a digital environment, so too have the fraudsters."

In the arms race between financial institutions and cybercriminals, tokenization-where a "token" acts as substitute value for a consumer's Primary Account Number or PAN-is another new weapon that card issuers are employing to close the missile gap. …

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