Tokenisation to help accelerate Australia’s move to digital payments in 2015
New research from Visa reveals Australia is uniquely positioned to drive the next phase of digital payments
Sydney - New research released today from Visa, the global payments technology company, shows Australian consumers are ready for the next wave of digital payments with growing interest in using their smartphone to make payments.
According to Stephen Karpin, Group Country Manager for Visa in Australia, New Zealand & South Pacific, “We expect the smartphone to be at the centre of the Australian payment experience this year, both in-store and online, and the challenge for the industry is to be ready.”
Supporting the move to mobile payments this year is tokenisation, an additional layer of security for mobile payments that is set to be rolled out in Australia in 2015. Tokenisation replaces the 16 digit card account number with a unique series of numbers (a “token”) that can be used for card payments in the digital world, without exposing a cardholder’s more sensitive account information.
According to Mr. Karpin, Visa’s introduction of tokenisation this year will be key to assisting the next phase of digital payments.
“While tokenisation will be a largely invisible part of the payment process for Australian consumers, it will bring the benefit of added security to their digital payments. This is timely because Australians have proven to be a nation of early adopters with respect to payments innovation.”
“Just as 2014 was the year contactless payments reached mass adoption in Australia, with over 75 million Visa transactions taking place on tap and go each month1, 2015 is poised to be the tipping point for mobile payments,” he said.
New research for Visa by UMR Strategic shows Australians have high smartphone adoption with seven in ten people (70%) owning a smartphone and a growing number interested in using their mobile to make purchases (53%)
But according to the research, the greatest barrier to shopping online is still payment security. Just under half of those surveyed (46%) have stopped a purchase when shopping online because they didn’t trust a merchant with their card details.
Australian merchants are keenly aware of customer concerns when shopping online, with almost nine in ten (87%) citing the importance of keeping customer credit card details secure as a high priority for their business. A further 84 per cent of merchants say an additional layer of security like tokenisation would be a positive development.
Tokenisation, when adopted, will protect merchants because payment information they hold will be replaced with a token. Tokens hold far less value for fraudsters, because they can’t be used to transact outside of their authorised domain.
Tokenisation also opens up the potential for a range of internet-connected devices and wearables to become secure vehicles for commerce. Tokenisation breaks down the barrier of risk around putting sensitive account information into more and varied devices.
“Tokenisation will not only accelerate the move to mobile payments in Australia, but also provide a secure foundation for previously unimagined ways to pay. In the future, any internet-connected device could become a secure way to make payments,” said Mr. Karpin.
What is tokenisation?
Tokenisation is a new layer of payments security that replaces cardholder information such as account numbers and expiration dates with a unique series of numbers (a “token”) that can be used for payment without exposing a cardholder’s more sensitive account information.
Why is it needed?
As digital payments accelerate and grow, tokenisation will avoid the need to disclose the cardholder’s most sensitive account information during digital transactions, making digital payments more secure for everyone, everywhere.
Find out more: Tokenisation: Why Australia, Why Now white paper
Visa Inc. (NYSE: V) is a global payments technology company that connects consumers, businesses, financial institutions, and governments in more than 200 countries and territories to fast, secure and reliable electronic payments. We operate one of the world's most advanced processing networks — VisaNet — that is capable of handling more than 56,000 transaction messages a second, with fraud protection for consumers and assured payment for merchants. Visa is not a bank and does not issue cards, extend credit or set rates and fees for consumers. Visa's innovations, however, enable its financial institution customers to offer consumers more choices: pay now with debit, pay ahead of time with prepaid or pay later with credit products. For more information visit www.visa.com.au and @VisaNewsAU.
About the Visa/UMR Strategic research
The research was conducted by UMR Strategic Research Pty Ltd. Fieldwork was carried out between 21 November and 15 December 2014. A nationally representative sample of 1,000 consumers and 200 merchants were interviewed online, all aged 18 years and over.
Fuel Communications on behalf of Visa 02 8217 6500 / 0421 924 367