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American Express looks to foster payments innovation with token system

By
November 4, 2014

American Express taps tokens for NFC payments.

American Express taps tokens for NFC payments.

American Express is swapping card numbers for tokens with its new NFC-based, token payment service.

By aiming to provide a more secure service, American Express is tapping into the buzz surrounding mobile payments in its own way. Through the provider’s recent efforts, it has integrated its services with Apple Pay along with the release of its own solutions to form a well-rounded balance of offerings.

“With respect to American Express’ new token service, our goal is to provide a safer environment for online and mobile payments,” said Mike Matan, general manager at American Express Global Network Business.

Mobile payment buzz
With the new token service, traditional card account numbers are replaced with unique tokens, which can be used to complete payment transactions online, in a mobile app or in-store with a mobile NFC-enabled device. By using tokens, merchants and digital wallet operators will no longer need to store consumers’ sensitive payment account information in their systems.

Tokens can also be assigned for use with a specific merchant, transaction type or payment device to provide further protection against fraud.

The token service offers a range of features, including a token vault to store and map tokens to card account numbers, the ability to issue tokens, lifecycle management services to create, suspend, resume or delete tokens and additional fraud and risk management services, such as authorization and payment data validation capabilities, for card-issuing financial institutions.

American Express Token Service is now available in the U.S. and will roll out internationally in 2015.

The financial services corporation has also recently announced that it has developed network specifications for Host Card Emulation. Its HCE specifications provide card-issuing partners with additional security options and solutions for payments made with mobile NFC-enabled devices that support Android OS KitKat.

Through HCE, card issuers can use a secure cloud server to store their customers’ card account details, which can be transmitted from the server to an NFC-enabled mobile device and then to a POS terminal.

Other mobile efforts
American Express is also teaming with the NBA to bring a digital innovation called Home Court Advantage, providing fans with personal insights and stories behind some of the players through video content, roundtables, interactive social chats and access to tickets and merchandise.

The video series will include numerous personal stories of players, such as Victor Oladipo and Steven Adams.

Fans will be able to view the roundtable discussions between players and experts to learn the latest basketball news, as well as their personal insights.

American Express and the NBA will conduct biweekly social chats, where fans will have opportunities to participate and comment on hot topics throughout the season using the hashtag #AmexNBA.

Tips and NBA facts will be generated by NBA insiders and will be shared both on Home Court Advantage and on American Express and NBA’s social channels using the hashtag.

American Express’ recent mobile efforts are widespread and versatile. While it aims to stay present in large-scale, live events such as NBA games, it is also crossing an untraced bridge with its new token service.

“Essentially, what the service is doing is taking sensitive card account details out of the payment process and replacing those card numbers with a token, which can then be used to complete a transaction,” Mr. Matan said. “By creating a more secure payments environment, we also think that we can help foster innovation and enable the next generation of payments as we see consumers are looking to pay in new and different ways.”

Final Take
Caitlyn Bohannon is an editorial assistant on Mobile Commerce Daily, New York

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