MasterCard officials believe tokenization services for private label (store-branded) credit card issuers will spark customer engagement and allow merchants to take advantage of the latest digital payment innovations.
MasterCard announced this week that BJ’s Wholesale Club, Kohl’s, and J.C. Penney will be among the first retailers to bring mobile payments to their private label cardholders later this year. All three retailers now are involved with forthcoming Apple Pay updates this fall.
MasterCard also has announced partnerships with some of the largest private label credit card issuers in the U.S., including Synchrony Financial and Citi Retail Services, to enable consumers to use their eligible credit cards within participating mobile payment and digital wallet services.
Shoshanna Rosenfield, Vice President, Global Products and Solutions, MasterCard told Loyalty360 that by offering private label tokenization, MasterCard officials expect to improve customer engagement as customers will have more secure choices in when, where, and how they can pay at that merchant. 
“Customers will also have peace of mind knowing that their favorite store cards will have the same EMV like security as the MasterCard Cards used in tokenized wallets powered by MDES (MasterCard Digital Enablement Service),” Rosenfield explained.
Rosenfield explained what factors prompted MasterCard’s involvement with private label credit card issuers and the mobile payment network.
“Our Private Label partners expressed interest in having the same high level of security provided by MDES and integration with our large digital partners that are integrated with MDES,” she said. “As this functionality was not initially supported, we listened to the needs of our private label partners and built the capabilities to give them connectivity to our tokenization services and our digital partners integrated with MDES.”
Tokenization support for private label issuers is made possible through the MasterCard Digital Enablement Service, which enables a connected device to be securely used for everyday shopping and payments, according to the announcement. MDES supports NFC payments with a mobile device at a physical point of sale, as well as from within a mobile app. Transactions are secured using industry-standard EMV cryptography and take full advantage of the most secure payments technology in the world.
Since the announcement of MDES in 2013, millions of MasterCard accounts have been tokenized for use in popular digital wallet services. MDES currently provides tokenization services for credit, debit, co-branded, prepaid and small business cards, with private label tokenization beginning in the third quarter of this year.