Payment tokenisation is the process of replacing a PAN with a unique payment token that may be restricted in its usage, for example, with a specific device, merchant, transaction type or channel. Traditional PAN-based payments will continue to be used alongside EMV Payment Tokens. The introduction of PAR, which does not contain financially sensitive data, enables the payment acceptance community to link a cardholder's payment token with their PAN transactions without needing to use their underlying card account number. This allows for a consolidated view of transactions on a payment account. This is also needed for security and regulatory reasons, such as risk analysis and anti-money laundering. It is also important for value-added services, as these often leverage historical transactional data to derive analytics and measurements to support customer programmes such as loyalty.
Mike Matan, current Chair of the EMVCo Executive Committee, comments: "Payment tokenisation enhances the underlying security of digital payments by limiting the risks associated with the compromise or unauthorised use of PANs. As well as increasing security, we want to ensure the payment acceptance community can continue to deliver associated payment processing and value-added services which are currently enabled by PAN. PAR addresses this by enabling all payment transactions – regardless of how they are initiated – to be processed in a consistent manner."
The presence of PAR fulfils a fundamental need to link PAN-based and token-based transactions together. PAR enables the industry to move away from dependence on the PAN as the primary linkage. PAR data cannot be reverse-engineered to reveal the PAN or EMV Payment Token and cannot be used on its own to initiate a transaction such as authorisation, capture, clearing or chargeback. Users of PAR data are required to protect PAR data in accordance with national, regional or local laws and regulations.
"EMVCo recognises the need to continually adapt and advance the EMV payment infrastructure to support and promote user convenience without compromising security," adds Jack Pan, EMVCo Board of Managers Chair. "Our work to establish a secure and scalable payment tokenisation ecosystem is no different. Since EMVCo launched its activity to focus on the development of a tokenisation specification, we have been working with industry stakeholders and EMVCo Associates to solicit feedback and determine appropriate updates to the framework, which will optimise the benefits of this technology. In addition to PAR, EMVCo has launched a Token Service Provider (TSP) Registration Process, to promote transparency and interoperability of TSP entities. We look forward to continuing our work with the industry to manage and evolve this payment technology further."