Credit card companies boosting security; Visa expanding tokenization to devices beyond Apple; Mastercard to spend $20M on biometrics, fingerprint matching
Update Planet Biometrics.com : MasterCard to invest US$20m in cybersecurity, launch biometric pilot Natalie Gagliordi / ZDNet : MasterCard, Visa make plays for payment security Jonathan Berr / CBS News : Visa and MasterCard are cranking up security Stephen Mayhew / BiometricUpdate : Mastercard, Visa to implement new cybersecurity measures and biometrics RTTNews : Credit Cards Adding New Protections Against Cyber Theft Alex Heath / Cult of Mac : Visa, MasterCard follow Apple Pay's lead with beefed-up security Jeremy Horwitz / 9to5Mac : Visa to follow Apple Pay's lead, use tokens for mobile & online payments Kate Cox / Consumerist : Visa, MasterCard Working On Security Improvements To Make Data Breaches Suck Less PYMNTS.com : Visa Takes Tokens Online Payments News : Headline News from PaymentsNews.com Luisa Beltran / PE Hub Blog : Cavanaugh named President of Global Employment Solutions Robert Hackett / Fortune : Visa, MasterCard will shell out millions to beef up cyber defenses Tweets: Aaron Lucchetti / @aaronlucchetti : Mastercard looking to offer voice and facial recognition for customers to improve cybersecurity, http://www.wsj.com/... @WSJ $MA
Context & Ripple Effects
In February 2015 the two card networks moved to close the gap Apple Pay opened: Visa extended tokenization beyond Apple's ecosystem to other devices and mobile and online payments, while Mastercard committed $20 million to cybersecurity and launched a biometric pilot built on fingerprint matching. The networks were reacting to a card-data breach environment where static card numbers had become the weakest link in the chain.
That pilot was the start of an arc the related coverage traces directly: Mastercard tested approving online purchases with fingerprint and face scanning that same fall, then moved biometrics into production as selfie-and-fingerprint password alternatives across the UK, US, Canada and parts of Europe by 2016.
First-order effects
- Visa's tokenization expansion means device makers and payment app developers outside Apple can issue single-use tokens instead of handling raw card numbers, immediately shrinking the pool of exploitable account data on mobile and online transactions.
- Mastercard's $20M cybersecurity spend puts its fingerprint-matching pilot in motion, making enrolled cardholders the first test population for replacing passwords at checkout.
Second-order effects
- Apple loses its exclusivity over tokenized mobile payments — the feature that differentiated Apple Pay becomes infrastructure any device can license, forcing differentiation back onto hardware and user experience.
- Biometric authentication creates demand for identity-verification assets downstream, a path Mastercard later followed with its $850M purchase of digital identity firm Ekata and opt-in facial-recognition payment tests in Brazil using NEC, Payface and PopID technology.
Third-order effects
- Tokenization's success cuts both ways: seven years on, the FTC was investigating whether Visa and Mastercard's security tokens restrict debit-routing competition online — showing that network-controlled security standards can double as competitive moats.
- If biometrics keep replacing passwords, the networks' role expands from moving money to verifying identity itself, concentrating authentication power (and its regulatory scrutiny) in two private firms.
The trend: Card networks are converting payment security from a shared-liability cost into proprietary infrastructure — first via tokens, then via biometrics and identity verification — which draws them deeper into both consumer identity and antitrust scrutiny.