PHOENIX MasterCard is determined to take its tokenization technology for Apple Pay and spread the security method to many other payment products, including the card brand's own MasterPass digital wallet.
"Our interest is more about how do we take this moment that Apple has created in security and take it across all of the other channels in operating systems and smart devices," said Matt Barr, head of emerging payments in the U.S. for MasterCard.
Apple has suddenly become an important stakeholder, but the security concerns its Apple Pay wallet addresses also exist in the broader payments ecosystem, Barr said in an interview and presentation Oct. 21 at SourceMedia's PayThink conference.
In Apple's tokenization process, consumers obtain a "device account number" as opposed to payment card numbers. When the consumer enrolls a card in the Apple Pay app, it is encrypted and sent to the card network, which sends back a token to be stored on the phone's secure element. No card data is ever on the phone or in an Apple vault.
MasterCard will be prepared to provide tokenization and other services to its issuing partners, he added. Visa also provides tokenization technology through Apple Pay.
"Tokenization starts with Apple, obviously, and we think it is terrific because they have sold millions of these devices within a month," Barr said.
It is only a matter of time before tokenization will become the security measure for purchases made through the MasterPass platform, Barr said. MasterCard has singled out MasterPass as playing a key role in the card brand's financial strength in addition to illustrating the company's commitment to digital transactions in the future.
"When you start talking about an online, token-based commerce, for us, that will be brought about through MasterPass," Barr added. MasterCard does not operate as a "wallet issuer," but rather as providing the MasterPass technology that allows its issuing partners to issue their own wallets, Barr said. MasterPass is now live in more than 10 markets.
MasterCard also watches Google's actions closely, considering Samsung's Android devices have more market share worldwide than Apple's handsets, Barr said. Google Wallet uses Host Card Emulation to simulate a Near Field Communication transaction without requiring access to the phone's secure element.
"[HCE] is very important because it means a mobile network operator can't restrict access to the secure element and it means our issuers can deploy services on Android that use NFC," Barr said.
All payments stakeholders have various technologies unfolding that can help the industry provide stronger security for payment data, Barr said.
In an example of what the future may hold, MasterCard is partnering with Major League Baseball to support various contactless payment methods at this year's World Series, which started Oct. 21. Fans at the games in Kansas City or San Francisco will be able to make purchases through Apple Pay for the first time at sport stadiums with the support of MasterCard's tokenization, or Digital Enablement Services.
"We want to move away from situations where card details are shared live and move toward tokenization," Barr said. "The only place the card numbers stay is on the piece of plastic. In other places, we are leveraging NFC and HCE, or using MasterPass to bring tokenization."