AmEx Initiative Is Trying To Make Mobile Payments More Secure


We support reforms to the financial marketplace that protect consumers from unscrupulous banks and lenders.

By Consumers Union on Tuesday, November 4th, 2014

American Express today announced the creation of American Express Token Service, to help card issuers, retailers and others in payments to support tokenization, a more secure mobile payment technology.

amexIn payments, a token is a bunch of numbers that stand in for a consumer’s payment account information. When tokenization is in place, the token – not the payment card information – is sent to the retailer. The retailer never handles consumer payment data. This means payment information is less likely to get hacked and then used as happened after the big data breaches of the last year.

How many headaches would tokenization have saved if everyone who has shopped at Target last holiday season had used it? A lot.

Tokenization makes consumer payments more secure because it obscures the information crooks want to steal. It’s all but impossible to reverse engineer a token to determine the payment card it’s tied to. If a token gets stolen, the token is corrupted but not the underlying account. A token can be cancelled, though the account that it’s tied to goes on. No more hassles of having to cancel your cards after you get a breach notification if your payment information was tokenized.

So when can you use it?

Tokenization is already available with many mobile wallets, including Google Wallet, Softcard and ApplePay, as our colleague Jeff Blyskal reported. But it is unlikely to be available soon for those of us who continue to rely on the plastic in our wallets rather than our phones to make purchases. For us, we’ll have to wait until smart cards – the ones with the chip in them – become widely available. We say that time can’t come soon enough.

Do you worry about data breaches and payment card fraud? Tell us about it in the comments.

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