The tokenization meaning seems complex due to the layers it involves. The process doesn’t make buying online harder for customers. In fact, they often don’t know this security is in place unless your homepage shares it with them. The process changes the numbers associated with a card transaction to a combination of letters and numbers. The length of the new token doesn’t have to be the same as the numbers on the credit card charged.
It is similar to the way encryption works within a brick and mortar company. Tokens are used online and they are stored separately from the actual card number. Should the business data be compromised, there is no way for scammers to get the real card numbers or other pertinent details. It reduces the chances of them scamming someone who made a legitimate online purchase.
What is a Token?
When a token is used, sensitive information is replaced with it. In addition to the username and password for access, there has to be access to the encryption for the token. If hackers or scammers get the information, they can’t do anything with it because they don’t have the means to decipher the token. That renders such information useless to them so trying to steal it won’t benefit them.
The customer still has the same benefits with the token. They can still cancel a recurring payment or they can ask for a refund. This is all handled in accordance with the business they purchased from and their established policies. The cancellation or the refund will go back to the card that was used. From the customer’s point of view, nothing changes other than they have more security when they pay online.
Difference Between Tokenization and Encryption
While tokenization for online purchases and encryption for in person purchases are similar, there are plenty of differences. While both of them add extra security, the way in which they do that is different. Encryption isn’t as safe because it is possible for someone to get their hands on the key. With that, they have the ability to decode the information and take advantage of all of it.
While that isn’t easy to do, it can be done. Tokens take it to a much higher level because of the complexity within the changes. Each token is randomly created; there isn’t a code to go with it. This means they can’t find a way to get a key and then use it to get the numbers for all of the transactions. There is no way they can make the necessary changes for each one and that means such data isn’t going to do them any good! It eliminates any reason for them to try to hack it!
They would have to get access to the token vault and to the original information vault. This isn’t possible within the system without an extremely high layer of access. For someone within an organization, they typically only give access to someone for one or the other. Should there ever be any breaches, it would have to be done from an in-house level. It wouldn’t take long for those involved within the business to be caught. They are well aware of this so the risk is low.
Tokenization and Credit Card Transactions
As a consumer, you want to feel confident when you pay using credit or debit cards. The process of tokenization reduces the risk of information being compromised. When a business has this type of design in place, it helps reduce the risk of your information falling into the wrong hands. Most banking institutions as well as medical providers use tokens for this reason.
Tokenization and credit card transactions continue to increase. This is due to the volume of customers buying items online with the use of a credit or debit card. They love the convenience and they often get rewards attached with that card for each transaction. Customers don’t have to jump through hoops to complete this process so they aren’t inconvenienced in any way.
Business owners like the additional security tokens offer for those transactions. They appreciate the business and want customers to return. They have a responsibility to do all they can to protect consumer information. Transiting to a platform where tokens are used doesn’t have to be difficult for a business. Working closely with the right provider can make it a smooth change.
How does it Work?
When tokenization is in place, the customer enters their credit card information. It is immediately processed but then assigned different values. This means it is impossible for anyone hacking that information to obtain the actual card number used to process that completed transaction. Most credit card transactions are one-time authorizations.
However, tokens can be used for recurring billing too. For example, when a customer signs up for a monthly subscription. They only enter that card information once. With a token in place, it is encrypted. The next month when payment is due, the system recognized the token and the encryption. It doesn’t revert back to the original card number to complete that transaction.
Benefits of Tokenization
Improved overall security for credit card transactions is the largest benefit with tokenization. It reduces the risk of the information being taken and used without authorization. With the number of online credit card transactions rising, security needs to move forward with it. A great token system continues to implement the best practices and safety regulations.
Tokenization gives customers peace of mind. They can buy what they want online and not fear their information is falling into the wrong hands. It encourages them to buy what they want and not hesitate due to the risk of credit card fraud.
From a business point of view, it gives owners satisfaction. They know they are going above and beyond to help offer security for their customers. Should there be a breach, it limits the liability of the business because they do have measures in place for security. It can reduce the costs for a merchant account too if they show they are taking such action. Since there is no key code to work for access to all of the credit card numbers, security is top of the line.
There tend to be fewer audits involved between PCI and DSS when tokens are used. This is because the company’s risk of a cyber threat is much lower. The actual card numbers and the token numbers created are never stored in the same vault location. This system continues to uphold security and it is easy enough for transactions to be completed rapidly.
PCI and DSS audits happen when you capture sensitive information regularly. The more daily transactions your business does, the higher the risk of an audit. With the tokens in place, there are layers of additional security, so the need to conduct such audits is lowered. The annual PCI questionnaire still has to be completed. However, tokenization makes it faster to complete and increases the chances of passing it without red flags.
Processing is easier to manage because you only have one entity to work with for your gateway. They can help you get details about payments or to resolve any issues a customer may have. They can help you take care of any technical problems or system errors to ensure a smooth and simple checkout process for your customers.
How to Include Tokenization for your Business
You can count on Payline to help your business with successful tokenization. Our company uses secure gateways designed to provide the best layers of security. The features we offer ensure your data is protected. Scammers and hackers are looking for vulnerable entities where they can use that data for their own gain.
Tokenization isn’t expensive, and it is fast and easy to get a free quote. Such security in place is going to save you money in the long run. Audits are time consuming and expensive so if they are less likely to happen you save there. Your business won’t get a bad reputation due to a security breach.
Tokenization takes security for credit cards processed online to the highest level of protection. It has to be put in motion correctly though to protect customer information. The IT support behind it needs to be available 24/7. The wrong entity to handle tokens for you can become a nightmare and allow issues to slip through the cracks. With Payline in your corner, you don’t have to worry about anything!
Reducing liability for any security concerns can lower your per transaction cost compared to not having such security in place. Upgrading to the use of tokens can give your business and your customers the extra security you need. It is too much of a risk not to protect against data breaches.
Don’t let your business be an easy target for them. Payline can help you upgrade that security so your consumer information is safe. Contact us today for a no obligation personalized consultation! Our experts can answer your questions and help you use tokens to take your business to the next level of security for online credit card payment transactions.