The Clearing House has become one of the first Mastercard-certified, third-party token service providers on behalf of issuing banks.
A partnership with Mastercard will allow The Clearing House, a provider of core payments infrastructure and a catalyst in the real-time payments movement in the U.S., to support current and future token capabilities.
Tokenization, the process of converting a 16-digit payment card number into an alternate number or "token" for security purposes, will have a significant role in mobile payments, remote purchases and Internet of Things transactions.
The Clearing House’s tokenization solution conforms with the card industry’s EMVCo framework and fully complies with the Mastercard Token Service Provider Standards, which were initially published in August 2016. TCH can now offer fully compliant tokens that transact over the Mastercard network.
Historically, card issuers have performed the functions of account generation and management, but with tokens in play they find strategic value in the ability to manage that process as well. It gives issuers the option to generate and manage credentials, while also working directly with token requestors.
“The safety and security of payments is paramount to TCH and our owner banks, and was a core rationale for our initial token work stemming back several years.” Dave Fortney, executive vice president of product development and strategy at The Clearing House, said in a press release. “We are excited to partner with Mastercard to provide issuer optionality and functionality for token services.”
The Clearing House will launch its card tokenization solution in the next quarter, and is in the process of extending the solution to other networks it manages, including Real-Time Payments. TCH has been working on the Real-Time Payments rail for the better part of the last year and is expected to launch the system for banks before the end of the year.
“In the digital age, where all connected devices are becoming commerce devices, we must make security a core focus,” Sherri Haymond, executive vice president of digital partnerships, said in the release. “Through this partnership, banks that issue Mastercard-branded cards now have the choice to tokenize their customers’ accounts through TCH, providing their customers digital payments options that offer the same safety, security, rights and benefits as accounts tokenized by Mastercard.”