By Tess Stynes
Visa Inc. (V) said its new "token" service that aims to improve
the security of electronic transactions made online and with mobile
devices will be available to U.S. financial companies that issue
its credit cards beginning next month.
Visa said it would roll out the service to financial
institutions in phases--initially supporting early participants in
the "Apple Pay" launch, and then extending the service availability
to all of its U.S. clients.
A phased rollout of the service that uses technology called
"tokenization" will begin overseas starting next year, the company
said.
The move is part of a broader push by card-issuing banks and
merchants to improve security for electronic payments.
The technology can be used for online transactions, payments
made in a physical store with a smartphone, and with merchant
applications that consumers load onto a smartphone. By getting rid
of the sensitive card information, banks and merchants can leave
hackers with nothing of value to steal if they break into their
computer servers.
Both Visa and rival MasterCard Inc. (MA) are rolling out the
technology, which replaces cardholder information such as account
numbers and expiration dates with a unique series of numbers that
validates the customer's identity.
Visa's launch comes the same day as Apple Inc. (AAPL) introduced
a digital-payments service tied to its iPhone 6 handset that will
allow consumers to make purchases using just their smartphones,
marking the company's first big push into brick-and-mortar
payments.
Apple said it hopes to speed up the checkout process, make
credit-card payments more secure and ultimately to replace physical
wallets.
Apple Pay, as the new payments service is known, will be able to
store credit cards from Visa, MasterCard and American Express Co.
and will work at a number of stores, Apple said.
Write to Tess Stynes at tess.stynes@wsj.com
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