Say Goodbye to Plastic

By Tom Davis is the SVP, Finance & Technology with CSCU

Wouldn’t it be nice to say goodbye to plastics? Imagine your cardholder loses your card while away on a business trip. Imagine your cardholder getting that dreaded phone call or text alert notifying them that their debit or credit card number has been compromised and the card has been shut down. These are tough realities, right?

Recent developments in tokenization and proximity payments, such as mobile wallets and cardless cash access at the ATM, all working together, could make these situations a non-issue in the future. Mobile Wallets, including Apple/Samsung/Android Pay, FI-branded wallets, PayPal, smart watches like the Apple Watch and the Samsung Gear, and in the future, your car and your clothes could replace plastics. That’s right…all of these new form factor innovations could replace plastics in the future. Imagine reissuance where no plastics need to be mailed, no activation, no new card numbers for your members, and no disruption in service.  All of this is possible in the future. A world where reissuance is cheap and easy…and immediate.

Imagine that next CAMS alert, or that cardholder stranded in a strange town with a lost device…just a push of a few buttons and voila! Problems solved for mere pennies per card with little or no exposure to fraud.

Tokenization is the replacement of the PAN (the card number embossed on the card) with a number that looks like a different card number, but is only to be meaningful with specific device or merchants (domains). That is, the card number is replaced with a unique token assigned to your Apple Watch, and a different token for your iPhone and a different token for different card on file merchant, etc. If a token is lost or compromised, it will only affect the domain it was intended to be used with.  And better yet, if that token is compromised or lost, we can reissue that token in a mere matter of seconds…and in some instances, our cardholders may not even need to know. Better yet, if your cardholder loses their watch, that token can be shutdown without affecting payment in other domains like their phone or card on file merchants.

Granted, using your mobile wallet isn’t possible everywhere you shop. And tokenization hasn’t been pushed out to all card on file merchants. Not yet, anyway. But as the payment landscape changes, the world without plastics becomes more of a reality. We’re beginning to see this sea change—Apple Pay is accepted at hundreds of thousands of restaurants, hotels and grocery stores, while Samsung Pay works virtually everywhere that a mag stripe card works. And in 2016, we are starting to see the roll out of tokenization to card on file merchants. We are starting to be able to envision a day without plastics.

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Posted in NWCUA.