WASHINGTON, D.C. -- NACS, the Association for Convenience & Fuel Retailing, joined forces with several other retail trade groups to ask all stakeholders in the payments industry to devise an open and universal tokenization standard in an effort to reduce fraud.
Tokenization is the process of replacing sensitive account data and identity information with a unique token or symbol, making it less vulnerable to a security compromise.
"Improving security and consumer confidence in the U.S. payments system is a top priority for the merchant community," reads the statement issued by NACS, the Food Marketing Institute, Merchant Advisory Group, National Grocers Association, National Restaurant Association, National Retail Federation and the Retail Industry Leaders Association. "We call upon all stakeholders in the payments industry to come together to ensure open and efficient standards to better protect U.S. consumers and businesses from payment card and system security threats."
The retail groups added that payment card data is most vulnerable at three main points: where the card is swiped or a card number is entered; where card information is stored; and where card information is transmitted.
In addition, the retail trade groups noted in the statement that the full benefits of tokenization can only be realized by U.S. consumers and businesses if the technology is created on an open platform that enables all technology providers to compete equally. An open platform would also ensure merchants can support the technology across multiple providers, hence making the backend security processes seamless.
"Tokenization will also be a valuable tool to secure data in other aspects of commerce, such as age verification identity checks, and storage and transmission of electronic health records and pharmacy prescriptions," reads the joint statement. "Ensuring an open standards process for the development of tokenization technology will result in a final standards product appropriate for other aspects of U.S. commerce beyond just payments, and will be more easily and efficiently integrated into all hardware and software business environments."
An open, universal tokenization platform is supported by several independent, unbiased professional standards organizations, the trade groups concluded in the statement.