PDF Version: Tokenization and Encryption
30 January, 2017
Tokenization is one of the most advanced technologies to strengthen digital payment security for customers and e-commerce business owners. It involves replacing the sensitive credit card information with randomly generated unusable symbols or tokens. As a result, the hackers are not able to decode the data as it passes from the user’s network to the payment gateway.
Businesses that deal in online financial transactions are required to provide a secure payment processing system to protect the customers’ data. Right from the pre-authorization stage to the processing and final payment, information should be transmitted only through secure channels. With the advancement in technology, hackers have started to use more sophisticated tools and techniques to steal online transaction data. Tokenization offers an additional layer of protection that goes a step ahead of what is achieved through PCI compliance.
How Does Tokenization Work?
When an ecommerce business employs tokenization during processing online payments, the sensitive information of the customer such as username, password, card number etc. is sent to a secure server, known as vault. Here, all the data is converted into a random string of numbers, which is completely different from the original card number. It is then passed through a validation test to make sure that the token, in any way, is not similar to the account number.
With tokenization, even if cybercriminals are able to decode the card information, they cannot gain any monetary value as the data does not reveal any information about the customer’s account.
Benefits Of Using Tokenization For Online Transactions
- Reduces liability for customer data protection
Tokenization does not require the customers’ card details to be stored in the computer system or network. It only consists of the random string of numbers. This minimizes a business’ liability towards protecting financial data because the information stored is not related to the customers’ primary account numbers.
- Significant saving of time and money associated with PCI compliance
Ensuing PCI compliance often requires the online retailers to make expensive hardware and software upgrades in their payment processing systems. Non-compliance, on the other hand, can be costlier. As tokenization does not require the merchants to hold sensitive data in the back end, PCI compliance can be made much more cost efficient.
- Reduces the scope of PCI compliance
Using unique tokens in place of encrypted card holder data can reduce the scope of the systems for which PCI compliance is required. Thus, you can eliminate the need of penetration testing and regular vulnerability as well as PCI scans.
We, at Centex Technologies, offer IT security solutions to business firms in Central Texas. For more information, you can call us at (855) 375 – 9654.