Tokenization: A High Stakes Game for Stakeholders

News Release

Tokenisation: A High Stakes Game for Stakeholders

– Payment Networks Using Tokenisation to Extend their Reach and Control –

(Oakville, Ontario – November 5, 2019) — Tokenisation has become an important component of enabling secure payments in Canada, and the payment networks are using tokenisation to extend their reach and control over the payments ecosystem, according to a new in-depth analysis by Technology Strategies International Inc. (TSI). The report, titled Retail Payments Tokenisation in Canada – The Paths to Success for Canadian Payments Stakeholders, highlights the dominant roles currently being played by established payment networks, namely, Visa, MasterCard and to a lesser extent, Interac, and suggests that issuers, processors and merchants should look carefully at the impact that this will to have on their business since there are significant implications in terms of operations, marketing and compliance.

“There is no doubt that tokenisation can be a powerful tool in controlling fraud in Canadian retail payment transactions. However, merchants, processors and issuers need to fully understand the significant impacts tokenisation will have on their role in the Canadian payments ecosystem, and to plan accordingly” says Mike Vaselenak of VCS Technologies Inc., a 35-year veteran in Canadian payments and the lead author and analyst for the Navigation Report. “There are a number of additional opportunities that arise as a result of tokenisation, for example, leveraging it into new products and services, but by the same token there are significant threats of disintermediation.”

The report says that the benefits associated with tokenisation often tend to be strategic in nature. As a result, they tend to be longer term and in some cases are more difficult to quantify. The costs, on the other hand, tend to be operational and developmental, and therefore more immediate.

“The business case for tokenisation is complicated by fact that there is no clear and direct revenue stream from consumers to stakeholders in the payments ecosystem for adopting tokenized payments,” says Christie Christelis, President of TSI and co-author of the report. “Consumer awareness of what tokenisation is and what the benefits might be is, not surprisingly, largely non-existent and this is exacerbated by the fact that most consumers realize that, for the most part, they have zero liability for fraudulent use of their payment instruments.”

The report goes on to point out that the traditional four-party model for payments is being supplemented by additional services in a tokenised payments world, and describes a six-party model that is more representative of the new paradigm. This model provides opportunities for introducing additional services where new business models can be developed based on the careful design of tokenisation offerings that optimize the mix of in-house, payment scheme and third-party services.

“Stakeholders that are considering implementing or supporting tokenised transactions need to identify the true capabilities and shortcomings of tokenisation as it is currently being offered in Canada, and how those capabilities and shortcomings relate to their organization’s business objectives,” Vaselenak says. “Tokenisation of retail payments in Canada adds an additional level of complexity to the Canadian payments processes and the role of legacy payments stakeholders.”

Other key findings from the report include:

  • Tokenisation technology is evolving rapidly, with payments tokenisation platforms pushing into non-payment credentials areas
  • Tokenisation will help unlock new online payments options and stimulate secure online transaction growth
  • Canadian banks are the best positioned to promote tokenisation

Retail Payments Tokenisation in Canada – The Paths to Success for Canadian Payments Stakeholders is a Navigation Report that presents an in-depth and independent assessment of retail payments tokenisation in the Canadian context. It provides essential guidance for merchants, processors and issuers who are keen to understand and develop the real business case for retail payments tokenisation. It identifies the market, systems, operations, compliance, data, risk, security and cost implications for stakeholders when implementing tokenisation in Canada.

The report:

  • Includes a history of payments tokenisation in Canada
  • Defines the key tokenisation concepts, processes, stakeholder roles and futures from a business perspective
  • Identifies the cost and risk drivers associated with tokenisation
  • Outlines the features and implications of the Visa, MasterCard and Interac tokenisation offerings
  • Provides business cases and decision trees for merchants, processors and issuers contemplating tokenisation.
  • Provides a unique Canadian specific end consumer market survey and perspective on attitudes regarding comfort with mobile payments, trust in payments stakeholders, attitudes toward payments security, and market segmentation of the value proposition of tokenisation.

The 100-page Navigation Report contains 33 charts, tables and diagrams, 32 Action Advisories, and 8 Key Market Findings. The analysis was supported with research from over 100 information sources, and drew on the findings of TSI’s 2017, 2018 and 2019 Canadian Consumer Payments Surveys conducted across a nationally representative sample of 2,000 Canadians each year.

More details of the report, together with a detailed table of contents (PDF download), can be found at:

About Technology Strategies International Inc.

Technology Strategies International Inc. is a leading Canadian technology market research firm based in Oakville, Ontario.  Established in 1997, the company has been tracking developments in Canadian payment industry for the past twenty two years. The Canadian Payments Insights series of reports can be found at For more information on TSI, please see  

About VCS Technologies Inc.

VCS has helped private and government clients on two continents move to their next generation transactional systems for over 30 years. VCS specializes in evaluating, strategizing, planning, defining, architecting, specifying and procuring payments and ebusiness solutions.

Media Contact Information:

For interviews please contact:

Christie ChristelisPresident, 
Technology Strategies International Inc.
Tel: +1 416 628 0796

Mike Vaselenak
VCS Technologies Inc.
Tel.: +1 416 624 4714


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