Payments Tokenisation Evolution: Glancing into the Future

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1 October 2015


Tokenisation is not a new concept, but it has evolved rapidly since EMV payment tokenisation specifications were published in March 2014, and will continue to evolve along multiple dimensions.

Apple Pay was the first solution to make use of EMV payment tokenisation, with the card networks playing the new role of the token service provider (TSP). Since then, the tokenisation landscape has evolved rapidly along multiple dimensions:

  • The growth in numbers and diversity of token requestors.
  • Geographical expansion of solutions making use of tokenisation.
  • Types of payment accounts supported by tokenisation.
  • Commercial framework.
  • Entities that play the role of a TSP.

In the report Payments Tokenisation Evolution: Glancing into the Future, Celent introduces the concept of tokenisation, looks at its history, and projects how it is likely to evolve. The report also discusses how Android Pay is different from Apple Pay and the implications that has on the role of the token service provider. Finally, it considers the arguments why the networks are unlikely to remain the only parties performing the TSP role, and how the TSP market might look in the near future.

“The networks deserve huge credit for stepping into the TSP role and delivering tokenisation to enable digital services such as Apple Pay, Android Pay, and others,” says Zilvinas Bareisis, a senior analyst with Celent’s Banking practice and author of the report. “The networks remain in the prime position to capitalise on tokenisation, although we expect competition for the TSP role to increase. Tokenisation brings the card rails into the 21st century and ensures that, even as the form factors change, card-based solutions continue to thrive and prosper.”

This 28-page report contains 12 figures and two tables.