Mastercard and TCH Partner on Tokenization Solution
The Clearing House to enable banks to supply and manage Mastercard tokens with new solution
New York, NY and Purchase, NY (October 19, 2017) – Today, The Clearing House (TCH) and Mastercard announced they are partnering to enable TCH to provision and manage Mastercard-branded tokens on behalf of banks. The partnership with Mastercard establishes TCH as one of the first Mastercard-certified third-party Token Service Providers to enter the US market, and enables TCH to support current and future token capabilities ranging from mobile payments to remote purchases and Internet-of-things (IoT) transactions.
The Clearing House has been a long time participant in tokenization, which replaces a physical card number with a unique alternate number or “token.” The Clearing House’s tokenization solution conforms with the card industry’s EMVCo framework and fully complies with the Mastercard Token Service Provider Standards, which were initially published in August 2016. This agreement paves the way for TCH to offer fully compliant tokens that transact over the Mastercard network. The partnership builds on Mastercard’s desire to support a robust token ecosystem and enable issuer optionality for services.
“The safety and security of payments is paramount to TCH and our owner banks, and was a core rationale for our initial token work stemming back several years.” said Dave Fortney, executive vice president, Product Development and Strategy, at The Clearing House. “We are excited to partner with Mastercard to provide issuer optionality and functionality for token services.”
“In the digital age, where all connected devices are becoming commerce devices, we must make security a core focus,” said Sherri Haymond, executive vice president, Digital Partnerships. “Through this partnership, banks that issue Mastercard-branded cards now have the choice to tokenize their customers’ accounts through TCH, providing their customers digital payments options that offer the same safety, security, rights and benefits as accounts tokenized by Mastercard.”
The Clearing House will launch its card tokenization solution in the next quarter, and is in the process of extending tokenization to other networks it manages, including Real-Time Payments (RTP).
Tokenization works behind the scenes, with a secure digital token acting just like a regular account number as it goes through the system and requires very little change in how customers and merchants operate.
The digital token is safer because it has additional layers of protections and can be limited in its use. A customer’s true account number is never present in the smartphone or in the merchant’s system, preventing malware residing on these systems from capturing that information in the first place. Even if the system is compromised, the digital token is of no use to criminals. The customer’s real account number remains securely stored in bank data vaults residing behind firewalls at highly-regulated and closely-examined financial institutions or payments networks.
About The Clearing House. The Clearing House is a banking association and payments company that is owned by the largest commercial banks and dates back to 1853. The Clearing House Payments Company L.L.C. owns and operates core payments system infrastructure in the United States and is currently working to modernize that infrastructure by building a new, ubiquitous, real-time payment system. The Payments Company is the only private-sector ACH and wire operator in the United States, clearing and settling nearly $2 trillion in U.S. dollar payments each day, representing half of all commercial ACH and wire volume. Its affiliate, The Clearing House
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