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"Visa Inc., MasterCard Inc. and American Express Co., the biggest U.S. payment networks, proposed using \u201Cdigital tokens\u201D instead of account numbers for processing purchases made online and with mobile devices.\n\u201CTokens provide an additional layer of security and eliminate the need for merchants, digital wallet operators or others to store account numbers,\u201D the companies said Tuesday in a joint statement.\nThe standard, to be applied worldwide, will be presented to other payment firms and industry trade groups in coming weeks, according to the statement. Tokens would be the digital equivalent of magnetic stripes on the back of plastic bank cards that contain customer information. They also may help to reduce fraud by providing uniformity as companies such as Google Inc. and Starbucks Corp. embrace mobile commerce and offer consumers new ways to pay.\n\u201CMobile is the future,\u201D Jim McCarthy, global head of innovation and strategic partnerships at Foster City, Calif.-based Visa, said during the conference call. \u201CWe haven\u2019t evolved to create a standard. For the first time, we are laying down the foundation.\u201D\nGlobal card fraud losses for banks, merchants and processors climbed 15% last year to $11.3 billion from 2011, according to the Nilson Report, a payments industry newsletter based in Carpinteria, Calif. Gross fraud losses in 2012 increased to $0.522 for every $100 in volume from $0.507 a year earlier.\nEMV-Chip\nTokens also would complement so-called EMV-chip technology, which has become a standard in Europe and much of the rest of the world.\nThe U.S. is among the last developed nations whose payment system relies primarily on cards with magnetic stripes and hasn\u2019t yet adopted EMV. Standards for the technology are managed by EMVCo, which was formed in 1999 by Europay International, Visa and Purchase, N.Y.-based MasterCard. New York-based AmEx is also an EMVCo member.\nAs merchants worldwide deploy more EMV terminals, fraud is moving toward transactions conducted online or over the telephone where physical payment cards aren\u2019t present, according to an August issue of the Nilson Report.\nThe U.S. has high fraud losses \u201Cbecause it leads the world in online sales,\u201D according to the trade publication. \u201CSmaller merchants who do not invest in fraud-fighting tools are particularly vulnerable.\u201D\nImage: Peter Macdiarmid/Staff/Getty Images"^^<http://www.w3.org/2001/XMLSchema#string>
<http://mashable.com/2013/10/02/visa-mastercard-amex-digital-tokens/>