On 31 July 2018, the Payment Systems Regulator (PSR) published a report on contactless mobile payments (CMPs). CMPs are in-store payments that consumers make by using apps installed on their mobile devices. The apps allow consumers to upload their card details onto the app to make payments from those devices.
To technologically differentiate between a CMP and a contactless card payment, in contactless card payments, the consumer-related information transmitted to a point-of-sale terminal includes the payment card’s Primary Account Number (PAN). In CMPs, the mobile device transmits a replacement number, created through a process known as tokenisation. Tokenisation replaces the PAN with a ‘device primary account number’, making it less liable for the consumer’s payment details to be stolen during a payment.
The report concludes that while CMPs currently represent a relatively small percentage of transactions compared with alternative payment methods, their use is growing rapidly and the development of CMP as an alternative payment method has the potential to benefit both participants and end users in payment systems.
The PSR has not been told of any prevented innovation or practices in tokenisation service provision that would require an in-depth assessment of issues. In light of this it will continue to keep the sector under observation, retaining the option to investigate and act when it is necessary to address any identified problems.