Securing e-payments

TR Ramachandran | Updated on January 12, 2018 Published on June 01, 2017


Token services add an extra layer of security

Increased penetration of hand-held devices and affordable internet plans have boosted m-commerce in India. A research by IDC has projected global mobile payments volume will reach $4 trillion by 2020. A recent Visa survey found that 90 percent of consumers in India are interested in making a purchase via mobile payments in the next six months, and more people feel mobile payments are safer compared with cash. Demonetisation has provided a further fillip to cashless transactions.

But with the increase in internet penetration and mobility, security threats are also going up. How do we address the increasing vulnerabilities created by these new form of payments? One answer is tokenisation. Token services are designed to offer secure payments with a broad range of connected devices, across multiple digital wallet providers and with future payment innovations. It helps protect transaction by replacing sensitive payment information with a unique digital identifier or ‘token’. This encrypted token keeps actual card details private and has no value if compromised.

A paradigm shift

Tokenisation is an added layer of safety in digitised payments that create a water-tight security environment. This is how it works. A sensitive personal and financial data gets encoded into an alphanumeric number and passes through the system to the bank which decodes it and effects the payment.

Throughout the payment processing chain, only the token travels from one payment processing entity to the other. So, any attempt, to interfere/intercept the data will reveal only the token number.

Customers will no longer be required to store card numbers on e-commerce websites making them susceptible to threats.

Tokenisation is greatly beneficial not only for the customers but merchants as well. Acceptance of tokenisation in fact helps them achieve the twin objective of becoming more customer centric as well as cost effective, as tokenisation does not require merchants to make substantial changes to their payment acceptance systems.

We are moving towards a future where the universe of networked devices is set to grow beyond laptops and hand-held devices to car dashboards, wearable technology and even day-to-day objects. As customers seek greater convenience through automation, it is reasonable to anticipate that will all their devices connected through cloud technology they would want to carry out a financial transaction any time and anywhere.

The primary enabler

An exciting future awaits the payments industry in India, as all stakeholders and regulators come together to achieve a ‘less-cash dependent’ and eventually a ‘cashless society’ in the country, through universally accessible, efficient, innovative, safe and convenient e-payment products, technology and capabilities.

The success of creating a cashless society would be determined by the people’s willingness and confidence about to embrace new modes of payments. The success of all initiatives to encourage digital payments rests on two critical foundations: a) efficient infrastructure/delivery mechanisms, b) supported through strong measures to build a secure transaction environment. Token services has the potential to redefine the current payment ecosystem while also enabling a safe and secure experience for the customer.

The writer is Group Country Manager of Visa India

Published on June 01, 2017
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