Retail Payments Tokenisation in Canada: The Paths to Success for Canadian Payments Stakeholders

Retail Payments Tokenisation in Canada: The Paths to Success for Canadian Payments Stakeholders

The report provides essential guidance and direction for the tokenisation business cases of Canadian issuers, merchants and payments service providers. It examines payments tokenisation 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 tokenisation programs.

The report addresses the following important areas:

Unique Canadian history and approach to tokenisation
Types of tokens and their lifecycles
Stakeholder specific tokenisation roles, responsibilities, fees and costs
Compliance and standards applied to tokenisation
Future developments in tokenisation technology
Challenges with card scheme tokenisation programs
Stakeholder specific business cases and roadmaps to proceed with tokenisation
Thirty two Action Advisories provide essential guidance for business case development.

Key Questions Answered

Who will be doing what in the tokenisation 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 tokenisation in Canada? – There is a new compliance regime around tokenisation with some unique Canadian twists
Who is charging whom for tokenisation services? – While fraud costs may be reduced, somebody has to pay the additional tokenisation services costs
What does the card holder (as the ultimate consumer) think of all this? – Does the cardholder perceive tokenisation 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 tokenisation strategies and product plans. If your organization is looking for a path through the minefield in retail payments tokenisation, then this Navigation Report and its 32 Action Advisories is part of your essential reading.


CONCLUSIONS
Introduction
Navigation Report Organization
Research Methodology
WHAT is Tokenisation in the Canadian Context?
A Short History of Payments Tokenisation
The Game of Stakeholders
Definitions
Key Terms
Payment Token Types
Payment Token Lifecycle
Whose Standards?
Payment Tokens in Canada
The Players in the Game
Account Holder
Token Requestor
Merchant
Processor
Token Service Provider
Issuer
Settlement Network
The Six Party Model
WHO Plays What Roles in Tokenisation?
An Overview of Stakeholder Processes
Stakeholder Diagrams
Stakeholder Roles in Token Requesting
Issuer
Requestor
Service Provider
Stakeholder Roles in Token Provisioning
Service Provider
Issuer
Requestor
Stakeholder Roles in Token Processing
Merchant
Processor
Service Provider
Stakeholder Roles in Token Business Data
Requestor
Issuer
Processor
Service Provider
Stakeholder Roles in Standards and Compliance
Service Provider
Merchant
Issuer
Processor
Stakeholder Roles in Token Security
Requestor
Service Provider
Issuer
Merchant
WHY should a Stakeholder Consider Tokenising?
Stakeholder Tokenisation Fees and Costs
Issuer
Merchants
Processor
Service Provider
Evolving Stakeholder Roles in Payments Tokenisation
Settlement Network as Token Service Provider
Issuer as Token Service Provider
Issuer as Requestor
Processor as Token Service Provider
Combined Token Requesting and Provisioning
Merchant as Token Requestor
Tokenisation is Part of a Larger Payments Evolution
Features of the Scheme Token Services Offerings
Potential Upsides and Downsides
Merchants
Processors
Issuers
Schemes
Token Requesters
Hubs and Gateways
WHERE is the Business Case for Tokenisation?
A Solution in Development
New Stakeholders
Network Latency
PAR Integration
End Market View
Merchant Business Case
Back End Settlement
Third Party Solutions
Data Security
Supported Use Cases
Beyond Mobile
Stakeholder Business Case Factors
The Merchant’s Business Case
The Issuer’s Business Case
The Processor’s Business Case
The Next Generation of Tokens
True Token Interoperability
True Token Hierarchy
Vaultless Tokens
Multi Funded Tokens
Even Smarter Tokens
Multi Purpose Tokens
Internet of Things 2.0
Tokens Everywhere
The End of Payment Tokens?
Merchant, Issuer and Processor Paths to Success in Tokenisation
Opportunities and Risks
Questions to Ask about Tokenisation
WHEN is the Canadian Market Ready for Tokenisation?
A Market Perspective
Global Market Interest
Drivers for Market Uptake
The Importance of Consumer Buy In
Digital Payments in Canada
Canadian Consumer Perspectives on Tokenisation
Does the Canadian Consumer Perceive a Problem in online Payments Security?
Is the Canadian Consumer Willing to Share Credentials Data?
Does the Canadian Consumer Trust the Tokenisation Solution Providers?
Is there an Untapped Market for Online Payments?
Who Does the Canadian Consumer Trust for Payment Services?
Who Does the Canadian Consumer not Trust for Payment Services?
Potential Market for Canadian Tokens
Billions of Retail Payment Tokens
Market Segmentation
APPENDIX
Payment Account Reference
Merchant and Bank Issuer Compliance
Smart Token Multi Domain Logic
Payment Tokens as Securities
Tokens and Issuer Fraud Control
Understanding by End Consumers
Merchant Uptake as Requestors
Scheme Merchant Token Services
Cross Border Tokenisation
GLOSSARY

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