tokenization of credit cards

Tokenization of credit cards

Knows the tokenization of credit cards and their new protection system

The tokenization of credit cards, the recent launch of mobile payment applications like Apple Pay or Samsung Pay has made tokenization fashionable; a concept that is evolving within the security sector and the payment methods industry to which many companies belong.

It is a service that adds an additional level of protection to sensitive credits cards data; which is replaced with an algorithmically generated number called a token.

What is a security token at tokenization of credit cards?

Tokenization is often used to secure credit cards, where the customer’s credit or debit card (PAN) number is replaced by a series of randomly generated numbers (token). These tokens can pass through the Internet or the various existing networks; which are necessary to process the payment without the actual details exposed. In this way, the digits of the card are kept secure within a security vault.

In simplified terms, tokenization is a tool used to prevent a cardholder’s information from being duplicated digitally or online; something similar to the chip on the physical credit/debit card.

tokenization of credit cards

Tokenization vs. Encryption

Tokenization replaces the most sensitive details of the cardholder with a token. This helps secure the customer’s card details in digital or e-commerce transactions.

In contrast to this concept, there is another method of encryption, which is end-to-end encryption (also called “data field encryption”). This service encrypts the cardholder’s data at the origin and decrypts it at the final destination. Some examples of end-to-end encryption are VPN (Virtual Private Network).

Both tokenization and encryption are used to reduce the scope of PCI compliance by reducing the number of systems that have access to customer credit card information. Although both have their place in payment technology, tokenization is rapidly emerging as the most cost-effective and secure solution for protecting customer card information and reducing the scope of PCI compliance. Unlike encrypted data, tokens are not mathematically reversible with a decryption key and PAN data is never displayed, so tokenization is the most reliable security method, reduces PCI DSS reach, provides meaningless payment card data to hackers, and works with today’s systems and processors.

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