Mastercard Brings Tokenization to Amazon to Ease Payments

john rambo

Mastercard Inc. MA has announced that it will provide tokenization service to Amazon.com, Inc. AMZN customers in 12 countries across North America, Latin America, the Middle East and Europe. The company will begin using Mastercard tokens via the Mastercard Digital Enablement Service (MDES) for transactions through 2020. Mastercard’s MDES is […]

Mastercard Inc. MA has announced that it will provide tokenization service to Amazon.com, Inc. AMZN customers in 12 countries across North America, Latin America, the Middle East and Europe. The company will begin using Mastercard tokens via the Mastercard Digital Enablement Service (MDES) for transactions through 2020.

Mastercard’s MDES is a frictionless commerce platform, which is live with more than 2,600 issuers and 1,200 token requestors around the world.
As e-commerce sees continued rapid growth trend among American consumers, especially amid the COVID-19 outbreak, which is coercing consumers to stay at home and shop online, Mastercard ceaselessly looks for ways to make those digital transactions safer.

One way of ensuring security to customer remittances is via tokenization. Mastercard’s Token Service standard is a security technology that replaces cardholder information, such as account numbers and expiration dates with a unique digital identifier (a token) that can be used for payment without exposing a cardholder’s more sensitive account information. Tokenization hides consumers’ confidential account information during digital transactions, making digital payments safe and convenient for everyone, everywhere.

Boom in e-commerce activity prompted people to shop online and store the card information for payment across various websites and via multiple devices, such as phone, laptop et al. Mastercard’s tokenization service enables customers to operate via multiple devices by automatically updating the card data stored in files. Unlike the physical cards, the network tokens have no expiry date as such and the credentials of new cards received in exchange of old outdated cards will be automatically updated. This technique of elimination and revision of card numbers and other related information facilitates the payment process.

Mastercard’s tokenization method creates visual cues, displaying familiar card art that instills consumer trust in the preferred payment mode. Such a seamless system increases the chances of completing a purchase. Notably, research proves that 80% cardholders are likely to accomplish a purchase when the image of their specific credit card is shown.

The need for tokenization is propelled by a rapid shift to online purchases, which is imperative to simplify the checkout process. Easy payment process reduces customer attrition and the subsequent shopping cart abandonment.

Mastercard’s tokenization service is a testament to its superior and high-tech digital product suite, which will go a long way in improving the shopping experience and boosting approval rates. 

The company has gained 33.7% in the past three months compared with its industry’s growth 31.2%.

Its peer Visa Inc. V also provides card tokenization via its Visa Token Service (VTS).

Mastercard currently carries a Zacks Rank #3 (Hold). A better-ranked stock in the same space is Green Dot Corporation GDOT, presently carrying a Zacks Rank #2 (Buy). The company’s earnings surpassed estimates in each of the trailing four quarters, the average being 247.59%.

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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