What is Credit Card Tokenization?
Credit card tokenization is the process of de-identifying sensitive cardholder data by converting it to a string of randomly generated numbers called a "token." Similar to encryption, tokenization obfuscates the original data to render it unreadable in the event of a data breach or other exposure.
Unlike encryption, however, credit card tokenization is irreversible, and tokenized credit card data can be stored inside an organization's cardholder data environment without violating the PCI DSS. It can also be deployed in a format- and length-preserving fashion to retain much of the business utility of the original, sensitive cardholder data. This enables organizations to operate with minimal disruptions to their existing business processes.
How Does Credit Card Tokenization Work?
TokenEx uses randomly generated data called tokens to tokenize a credit card, meaning the original, sensitive credit card data is removed from your environment and safely stored outside of it while nonsensitive credit card token number is returned to you as a placeholder token for the credit card number. By swapping the credit card data, most commonly the primary account number (PAN), with a token, you’re relieving yourself of the need to store customer credit cards in your internal systems. From there, you can send credit card data to any endpoint via our patented, processor-agnostic Transparent Gateway.
Credit and Debit Card Tokenization Examples
Credit card tokenization works with a variety of acceptance channels. From call center solutions to ecommerce channels and mobile applications, TokenEx provides credit card tokenization for nearly any modern acceptance channel. Here are some of the ways our platform can provide tokenization for credit card transactions.
- Ecommerce
Merchants and other organizations that use web stores or online applications to accept payments can benefit from TokenEx's ecommerce tokenization. We offer a special Ecommerce Package—featuring the TokenEx iFrame and our patented Transparent Gateway—designed to minimize PCI compliance scope specifically for these customers.
For ecommerce acceptance channels, we use our iFrame to collect cardholder data directly from the fields of your checkout page, minimizing risk and the scope of PCI DSS compliance by preventing it from ever entering your cardholder data environment. Because we use the iFrame to ingest the data, you can use tokenization alongside credit card processing while maintaining the look and feel of your website's checkout page.
- Mobile
Organizations can use TokenEx to tokenize cardholder data captured from mobile applications on Android or iOS devices. Whether these applications are native or web-based, we can collect the credit card data traversing them and securely tokenize it for risk reduction and industry compliance. Similar to the way we tokenize credit card data from ecommerce entry points, TokenEx captures credit card information from browsers using either the iFrame or browser-based encryption. From there, data is tokenized and stored as it would be regardless of the acceptance channel.
For native mobile applications, TokenEx enables the tokenization of credit card data with its Mobile API. TokenEx’s Mobile API allows customers to send credit card and other sensitive data captured from the device using their mobile applications to TokenEx to be tokenized and safely stored. With our Mobile API solution, we can offer comprehensive mobile tokenization.
- Contact Centers
Call centers are popular stations for providing customer service and for accepting payments over the phone. These centers use technology such as point-to-point encryption (P2PE), interactive voice response (IVR), and dual-tone multifrequency (DTMF) to ingest payment card information. TokenEx can integrate with these technologies to tokenize sensitive payment data and remove the credit card information from the systems downstream from the call center environment. This relieves the organization from storing sensitive credit card data in its internal systems and reduces its overall compliance scope.
Additional Benefits of Credit Card Tokenization
Security and risk reduction are tokenization's primary aim, but the compliance benefit of using tokenization to reduce controls and remove sensitive data from scope can be just as valuable. By replacing sensitive cardholder data with an irreversible token, tokenization effectively removes sensitive data from a cardholder data environment. Because tokens are considered nonsensitive data, they can be stored and used for internal business purposes without bringing the system that stores them into scope.
In some instances, this level of scope reduction can be so great that an ecommerce web store, for example, can potentially use TokenEx's Cloud Security Platform to reduce its compliance obligations to a SAQ-A. The SAQ-A is a self-assessment covering only requirements 9 and 12 of the PCI DSS, which entail restricting physical cardholder access to sensitive data and maintaining an information security policy, respectively. This means an organization would outsource all of its other PCI DSS requirements and be responsible solely for requirements 9 and 12, resulting in significant savings in terms of overhead and operations.
