Payment card security standards body director: 5 major trends in the payment industry in 2017, 4 of which are directly related to blockchain

Jeremy King, international director of the Payment Card Industry (PCI) Security Standards Council, recently identified five major development trends in the payment industry in 2017, four of which involve blockchain technology, namely the Internet of Things (IoT) , blockchain payments , tokenization and encryption .

Tokenization, Cryptocurrency, Blockchain Payments and IoT

According to King, five major trends will dominate the payments industry in 2017: tokenization, cryptocurrencies, blockchain payments, the Internet of Things, and mobile payments. All of them appear to involve blockchain technology, either directly or indirectly.

King specifically pointed out that large-scale financial networks that hold users' private information and important financial data are like "honeypots" for criminals, as criminals can use users' identities and credit card information for a variety of criminal purposes.

To avoid any data theft, King said credit card and banking service providers must adopt end-to-end encryption (P2PE).

King said:

“As cybercriminals continue to target this ecosystem, more merchants are investing in P2PE to maintain payment transaction integrity and protect card data.”

However, a more practical and realistic approach to data protection is eliminating the need for data custodians. Credit card networks and banks are required by KYC and money transfer policies to store and hand over user data to law enforcement.

However, blockchain-based systems or digital currencies such as Bitcoin do not require this, and therefore they completely eliminate the possibility of personal or financial data being compromised.

As King stressed, the tokenization process is technically very complex, but it is necessary if the credit card network is to provide each cardholder with a serial number. This way, each card has its own token or serial number, making it impossible for thieves to make payments on behalf of the user.

Again, blockchain technology eliminates the need for tokenization, and each wallet has its own public and private keys. Unless the wallet information or Bitcoin is accessed through a third-party wallet service provider, hackers cannot access these wallets even if they successfully hack the wallet platform.

Mobile Payment

Finally, King noted that 2017 will be the year of mobile payments, with more and more millennials relying on their phones to settle payments and send peer-to-peer transactions via messaging apps.

As mobile commerce grows, King believes consumers will prefer to use cloud-based apps to make payments directly on their phones.

King said:

“Consumers will prefer merchants that use cloud-based apps to process payments, where they know what they want to buy before they even step foot in the store.”