Credit Card Tokenization Greatly Reduces the Risk of Data Theft

Throughout the payments space, credit card information changes hands millions of times each day. Each of these transactions requires cardholder data and additional payment information to complete—sensitive credit card information that must be secured in order to protect customers, merchants, and banks. To safeguard this sensitive data and comply with regulatory obligations such as the Payment Card Industry Data Security Standard, TokenEx's Cloud Security Platform utilizes cloud-based tokenization. By tokenizing with TokenEx, you can secure and desensitize cardholder data in compliance with the PCI DSS while virtually eliminating the risk of data theft.

What Does Credit Card Tokenization Mean?

Credit card tokenization is a method for deidentifying cardholder data via the tokenization process. Similar to encryption, tokenization works by obfuscating the original data to render it unreadable in the event of a breach or other exposure. Unlike encryption, however, tokenization is irreversible, and tokenized credit card data can be stored inside an organization's cardholder data environment without violating the PCI DSS. It also can 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 Data 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 data 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 Card Tokenization Examples

Credit card tokenization works with a variety of acceptance channels. From point-to-point encryption (P2PE) integrations for point-of-sale devices to call center solutions and mobile applications, TokenEx offers omnichannel credit card tokenization. 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 specifically for these customers.
  
  For ecommerce acceptance channels, we use our iFrame to collect cardholder data directly from your checkout page, preventing it from ever entering your cardholder data environment to minimize risk and the scope of PCI DSS compliance. Because we use the iFrame to ingest the data, you can tokenize credit card information 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 captures credit card data with its mobile software development kit (SDK). TokenEx’s mobile SDK can be installed within an application to capture credit card and other sensitive data from users where it is then sent to TokenEx to be tokenized and safely stored. With our mobile SDK solution, we can offer comprehensive mobile tokenization.

• P2PE
  For brick-and-mortar stores and other locations that use POS systems, TokenEx can integrate with many popular card-reader and PIN-pad devices to tokenize cardholder data ingested during card-present in-store transactions. This allows organizations that accept physical credit card payments to tokenize data and access the benefits of reduced scope and mitigated risk.
  
  TokenEx works with the top device brands (Ingenico, ID Tech, PAX, and more) to protect all payment data collected via card swipes or manually entered on PIN pad devices. TokenEx integrates with these devices to immediately encrypt, tokenize, and vault sensitive data using point-to-point encryption when integrated with the TokenEx tokenization platform.

• Contact Centers
  Call centers are popular stations for providing customer service and accepting payments over the phone. These centers use technology such as 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 call center environment. This relieves the call center 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.