DES MOINES, Iowa — As mobile payments becomes more ubiquitous, card tokenization efforts are on the rise.
In a survey of some of The Members Group’s credit union clients 38% said they have a mobile payments strategy in place today, and 59% plan to enable their cards for tokenization by the end of 2015.
According to TMG, the company has spent months preparing for the day payments would be made using NFC and tokenization. "With the introduction of Apple Pay, that day has arrived," The Members Group said in a communication sent to its clients last week.
TMG CEO Shazia Manus said, “What some may see as a disruptor to the payments industry, TMG views as validation of the path our experts have been traveling. Although the announcement of Apple Pay has created quite a bit of buzz about the new future of payments, EMV, NFC and tokenization have been part of TMG's strategic product roadmap for the past 18 months."
TMG product managers Brandon Kuehl and Brandon Bogler, who hosted Wednesday’s Webinar, have been part of TMG’s EMV and wearables strategies. Because many of TMG’s clients either have migrated to EMV or are in the process, Kuehl and Bogler drew several links between EMV and tokenization:
- Both are designed to reduce card fraud (EMV will mitigate card-present fraud losses; tokenization will mitigate card-not-present losses).
- TMG anticipates a tokenization liability shift similar to the one set by the major card brands for EMV.
- As with EMV, TMG will offer a migration process to enable clients for tokenization. This will happen under the product name TMG Token Services.
The company said TMG Token Services will include issuer enablement with the major card brands and Apple Pay, as well as integration with major card brands' token vaults to enable token management. Token Services will be incorporated within TMG's existing reporting products.
In the webinar, 73% of clients participating in the survey (57) said they have plans to participate in the Apple Pay solution. At the same time, 76% of clients (55) said they would be interested in an FI-branded tokenized mobile payment solution for Android. According to International Data Corporation (IDC), Android dominates the global smartphone market, with more than 255 million units shipped and nearly 85% of the market share in the second quarter of 2014.
