Digital Transactions Authoritative, insightful and timely information for payments professionals
Online-checkout provider Skipify Inc. is adopting tokenization technology from Discover Global Network to ease checkouts for Discover cardholders.
Tokenization replaces a consumer’s actual credit or debit card number with 16 other digits, which can help improve conversion rates for merchants and improve shopper satisfaction.
San Francisco-based Skipify says the early phase of the integration includes integrating Discover’s tokenization technology into its platform. Both automatically provisioned and manually entered cards in Skipify will be tokenized with Discover.
One of the advantages of tokenization is that, in the event of a card data breach, the tokenized card often is associated with specific attributes that prevent it from being used again if future use does not align with these attributes, which may include data from a legitimate use, such as a timestamp, amount, merchant, or other factor.
Tokenization also makes it easier for consumers to store a card on a merchant’s Web site without having to update it manually should it be replaced. Discover’s tokenization technology, like that from other card brands, can automatically update the card information without the cardholder taking steps. Discover also says the primary account number is detokenized at the Discover-network level and is done only after a cryptogram is validated.
Skipify says its work with Discover is part of its ongoing product development for new digital-shopping applications. “We’re building a new standard in payments, where people can check out using just their digital identity, and we’re thrilled to have Discover join us on this journey,” Ryth Martin, Skipify founder and chief executive, says in a statement.
Network token use has ballooned in the 10 years since the technology’s debut. It took six years—from the 2014 launch to 2020—for Visa Inc.’s token volume to reach 1 billion, but just four years to get to 10 billion. As of February, that figure is 12.6 billion, going up 40% year-over-year, Visa says. Mastercard Inc., too, has seen a boom in token use. It took three years to reach 1 billion tokens following Mastercard’s 2014 launch of the technology, and now the card network processes 1 billion a week.
The tokenization ecosystem is vast. It includes merchants, payment networks, token service providers, digital wallet providers, financial institutions that issue credit and debit cards, and issuer processors like Fiserv Inc., says Patrick Davie, Fiserv Inc.’s head of card services.
