When applying for a merchant account you may have heard your processor talk about tokenization, but exactly what is credit card tokenization and how does it benefit you as a merchant. Let’s take a closer look into the world of tokenization.
Tokenization is the process of de-identifying sensitive cardholder data converting it to a string of randomly generated numbers called a token. Like encryption, tokenization obfuscates the original data to render it unreadable in the event of a data breach or other exposure. It is important to note that an expired credit card will not be tokenized, and this is to ensure compliance measures are in place to protect consumer data.
How Does It Work?
Tokenization secures customers information. When you hear about data breaches, hackers are looking to get access to personal data that they can utilize for harm. However, with tokenization, it protects your credit card information by placing a random string of numbers to encrypt the data making the card information worthless in the hands of someone intending to cause harm.
The way this works is the token represents the data output from the initial input of the customer’s credit/debit information. The token is comprised of alpha-numerical characters that does not have any relation to the card data that it is replacing. The data is then placed in a PCI compliant database by the provider. Since the token replaces the initial card data it allows the information to be stored securely for further processing of the transaction by the merchant.
How does Tokenization Benefit Businesses?
It helps businesses protect customer’s data. Having tokenization ensures an added layer of protection for both the business and the customer. Although, there are no guarantees that a data breach won’t happen to your business, you can rest assured that tokenization will help keep your customer’s card information out of the wrong hands.
As a merchant you want to make sure you provide a safe and secure environment for your customers. Whether you have a brick-and-mortar location or e-commerce, protecting your customers data should always be top priority. The tokenization process helps keep data secured and allows merchants to store the tokens for future transactions as well as returns and refunds. Again, compliance is the name of the game when it comes to customer data.
If you are to learn more about it and how it can help your business, then give us a call today at 888-253-9692 or via email at [email protected]