Tokenization is the technology that retailers all over the world are talking about. That’s because retailers are starting to learn that when you tokenize Payment Card Information (PCI) and remove it from your business systems, the scope of your PCI compliance is significantly reduced, saving you hundreds of thousands of dollars in software support updates, audit costs, and other related compliance fees. Before we head down the tokenization path, the elephant in the room is that retailers store PCI and lots of it. That’s bad because your risk goes through the roof in the event of a data breach. Housing toxic PCI is a ticking time bomb because no organization is immune from the inevitable security breach. But with tokenization, hackers can’t steal what’s not there.
Tokenization and Fraud Prevention Need Each Other
Tokenization removes toxic PCI from your environment at the earliest point of the transaction stream, passing a token to your business systems and vaulting the PCI in a secure cloud environment. An open tokenization platform works in conjunction with third-party fraud detection services to lower your current fraud risk points. Layering your security solution maximizes your data security, reduces the cost of PCI compliance, while minimizing and even eliminating fraud risk points. A layered data security solution provides more freedom and flexibility for payment acceptance than you ever thought possible; as well as a chance to rest easy at night knowing that your customer’s data won’t be exposed. Layered data security needs both tokenization and prevention/detection to defend against the most cunning data breaches and fraud schemes.
Would Tokenization Have Stopped the Target Breach?
Yes and No. There is a huge difference between a breach and the successful theft of data. The Target hack was ingenious because they penetrated the network through the HVAC vendor’s network, so tokenization would not have prevented that breach. However, if Target had tokenized their data, storing it offsite in a secure data vault, then there would have been no sensitive data to steal. Hackers continue to change the way they use stolen data, so fraud prevention and tokenization at the point of transactions significantly reduces chargebacks, card-not-present fraud, and any other number of mind numbing headaches that come with getting hacked.
Why Tokenization Works
Tokenization works like a proxy in the payment cycle and immediately removes PCI, while working in conjunction with fraud providers, marketing analytics, or other third-party service providers. All of these processes operate in milliseconds and fall well within PCI latency guidelines. You get access to all of the customer data you need for your business processes, while protecting every one of your customer’s sensitive data sets. Tokenization is a proven technology, and retailers, banks, credit card companies, and anyone else who stores toxic data are flocking to implement tokenization solutions for a simple reason—it works.