Tokenization of Retail Payments in Canada

Tokenization of Retail Payments in Canada

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Risks, Opportunities and Challenges for Canadian Merchants, Processors and Issuers 

Tokenization of payments will have a profound impact on retail credit, debit and prepaid payments. The fundamental relationships between card networks, issuers, merchants, application providers, payments processors and cardholders are changing in a tokenized payment world. Key stakeholders are positioning themselves for their new roles in this new world of payments tokens. While tokenization provides immense opportunities for players in the payments ecosystem, navigating this terrain is complex and fraught with risks and challenges.

In-depth Insight
This comprehensive and independent Navigation Report provides compelling insights that address three key areas critical to building a successful business case for tokenization: 

  • What are the business, service and strategic opportunities and impacts of tokenization for merchants, issuers and payments solution providers?
  • How should different players respond to the drive towards tokenization?
  • What are the key considerations that cannot be overlooked in developing the business case for tokenization?

About the Report
The report provides essential guidance and direction for the tokenization business cases of Canadian issuers, merchants and payments service providers. It examines payments tokenization from the business perspective of the key players in the payments ecosystem and provides a critical assessment of the real value, challenges and implications of establishing or participating in tokenization programs.

The report addresses the following important areas:

  • Unique Canadian history and approach to tokenization
  • Types of tokens and their lifecycles
  • Stakeholder specific tokenization roles, responsibilities, fees and costs
  • Compliance and standards applied to tokenization
  • Future developments in tokenization technology
  • Challenges with card scheme tokenization programs
  • Stakeholder specific business cases and roadmaps to proceed with tokenization

Thirty two Action Advisories provide essential guidance for business case development.

Key Questions Answered

  • Who will be doing what in the tokenization of the card number? - The answer is both complicated and surprising
  • Who controls the link between the token and the ‘real’ number?New stakeholders and roles are being introduced into the payments ecosystem
  • Whose rules and standards will apply to tokenization in Canada?There is a new compliance regime around tokenization with some unique Canadian twists
  • Who is charging whom for tokenization services?While fraud costs may be reduced, somebody has to pay the additional tokenization services costs
  • What does the card holder (as the ultimate consumer) think of all this?Does the cardholder perceive tokenization as a solution, and does the consumer’s perspective matter? This answer is also complicated and surprising.

Essential Reading
This Navigation Report was written from a business perspective. It is designed to provide the necessary insight for issuers, processors and merchants to identify a way forward in their tokenization strategies and product plans. If your organization is looking for a path through the minefield in retail payments tokenization, then this Navigation Report and its 32 Action Advisories is part of your essential reading. 

Mike Vaselenak, the primary author of this report, has leveraged his three decades of experience and leadership in Canadian payments, coupled with in-depth research and interviews, to prepare this insightful Navigation Report. Focused interviews were conducted with participating card schemes, as well as leading Canadian and international experts on retail payments, payments security, and payments systems. The findings and conclusions were supported by TSI’s statistically valid Canadian Consumer Payments Surveys, which included consumers’ perspectives on retail online, physical and mobile payments as they apply to tokenization. 

Publication Details
Publication date: August 2019
Number of pages: 65 pages of in-depth analysis, advisories and insight

Subscription/Purchase Options
This report can be purchased as a stand-alone report through this website. It may also fall within your organization's subscription package.

Discounts are available for bundled purchases. Please contact us to enquire about bundled pricing.