Dutch bank ING and supermarket giant Albert Heijn are to pilot a tokenized payments service which enables customers to pay for online purchases from their bank accounts without needing to provide retailers with account credentials.
“The tokenization process replaces sensitive data (a customer’s bank details) with non-sensitive data (a string of random numbers known as a ‘token’) and benefits both customers and retailers,” ING says.
“Simple and safe, it saves customers from having to fill in bank details every time they make an (online) purchase, making it particularly relevant for repeat purchases and subscription payments.
“Once customers have given their consent, retailers create a token for them unique to that retailer for use in its (web) shops. Customers can manage their tokens in their banking (or retailer’s) app; they can also decide if they want to be asked for additional verification when confirming the order, such as fingerprint ID or face recognition.”
“For retailers, tokenization has the huge advantage of eliminating the need for keeping and protecting sensitive bank data for each customer,” ING adds.
“All they retain is the token, a random string of numbers that in no way contains account information or personal data of a particular customer. This makes the system virtually hacker proof. Tokenization also eliminates the obstacle of outdated account information blocking a payment.”
“To optimise tokenization ING is using a standard developed by Mastercard that generates, distributes and ‘reads’ the tokens for the retailer and the bank.”
A group of 1,000 ING customers are to take part in the pilot.
“When proven successful this innovative payment solution will be extended to other clients and other countries,” the bank says.