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Credit card companies eye new global payment standard

MasterCard, Visa, and American Express propose using a digital "token" that would allow consumers to make purchases without having to input account numbers.

Will the MasterPass be supplanted by a new standard?
Will the MasterPass be supplanted by a new standard?

MasterCard, Visa, and American Express have teamed up to create a new digital payment technology.

The companies say that their proposed standard would increase the security of payments via Web sites and mobile products by using a digital "token." Armed with a token, consumers wouldn't need to input account numbers for purchases.

So far, the companies haven't decided on a token standard, but they expect the industry to accept one before they move forward. From there, upon attempting to purchase a product on the Web or via mobile devices, a customer would be asked to provide his or her token. That token will then be used to process and clear the transaction in a similar way credit cards are used today.

"Tokens can be restricted in how they are used with a specific merchant, device, transaction, or category of transactions," the companies said.

Establishing a standard for digital payments has become a bit of an obsession for all kinds of companies. Banks, credit card companies, and Web-based firms, like Google and PayPal, are all making plays for digital dominance. How those companies will respond to a token crafted by the very firms they partner with and challenge should be interesting to watch.

It appears for now that the token standard is in its infancy. The companies plan to unveil more details and show their framework to other stakeholders in the coming weeks.