Protecting Credit Card Data With Payment Tokenization
What is credit card payment tokenization?
Credit card payment tokenization is all about keeping card numbers safe online. When a consumer pays for something through a webpage or mobile app, their card number enters a complicated ecosystem, traveling through several institutions before the payment is successful and the merchant receives money.
The process takes mere seconds, but with every stop along the way, card numbers are vulnerable and can be stolen. With payment tokenization, card numbers are protected from fraudsters because the card numbers themselves are never released by the merchant into the payment ecosystem to begin with.
Here’s what happens instead. The process of tokenization entails:
- Securing card numbers in a cloud-based vault as soon as a payment is made
- Creating and transmitting a substitute value
The substitute value is called a token. It’s a unique number, generated by an algorithm, to represent a consumer’s payment details as it goes through the system. If a token is stolen, it has practically zero value to the thief.
Tokenization vs. encryption – what’s more secure?
Tokenization is not the same as encryption, where the card number is hidden within the encrypted data and can be deciphered with a key. Tokens have nothing to do with the real payment data other than it’s associated with that data.
Compared to encryption, tokenization is more cost-effective and secure. It’s no surprise, then, that tokenization is becoming a standard security measure in the payments industry, especially for recurring payments and subscription services where card data has to be stored.
What are the benefits of payment tokenization?
There are many benefits of online payment tokenization in addition to the ones mentioned below – not only for consumers but for anyone who accepts payments. If you are a SaaS provider, here are the biggest advantages tokenization provides you and your clients:
- Tokenization removes sensitive card data from your systems. You can spend less time worrying about security and more time focused on your business.
- Tokenization reduces your PCI obligation by miles, because you've reduced your exposure to data breaches, making compliance easier.
- Tokenization protects you from internal threats, too. Disgruntled employees, contractors, suppliers, or anyone working within your organization cannot access your sensitive card data.
- Tokenization protects you from the fallout of data breaches that can harm your relationships with customers and your reputation.
The Easy Path to Tokenizing Payments
If you’re looking to add payments to your SaaS platform and are concerned about PCI DSS compliance, consider an integrated payments partner. Integrated payments partners, such as Payrix, will manage the tokenization of payments for you and take on a major portion of the compliance liability.
Using Payrix as an example, our proprietary card vault environment ensures all your clients’ card data is tokenized and stored, processed and transmitted within a totally secure network.
When a customer submits their credit card data through a Payrix hosted payment page, custom redirect, or other integration, the data is passed onto our secure and encrypted card vault environment.
Once the card details have been locked in the vault, our tokenization process runs a complex algorithm to generate and transmit a unique token for the card number, protecting you, your clients, and your clients’ customers.
Want to know more? Get in touch today.