Tokenization Explained

What is tokenization?

Tokenization is the replacement of sensitive data with a unique identifier that cannot be mathematically reversed. In your environment, tokens take the place of sensitive payment card data. Typically, the token will retain the last four digits of the card as a means of accurately matching the token to the payment card owner. The remaining numbers are generated using proprietary tokenization algorithms.

What is a Token?

Tokens are simply numbers and letters algorithmically generated hiding sensitive private personal information from possible threats. These encryptions normally protect payment data, personal information such as customer contact details, social security numbers and more. A comparative example of what a token looks like is things such as gift cards or vouchers. A gift card or voucher is substituting for cash money which in turn protects cash from becoming lost or stolen.
Manage Stored Credit Cards Screenshot with Data

Why is Tokenization Necessary?

Hackers, injections, brute force attacks or any other nefarious means to gain access to merchant’s customers valuable private data is ongoing. Hence why the payment industry is constantly working on ways to protect customers’ sensitive personal data and merchant’s private business data as well as their customers. The process of randomly generating numbers and letters offers an impenetrable security over personal and private data. So, the data for methods of payment are secure by exchanging it for a token and storing it.

Tokenization is a valuable addition to any merchant accepting multiple types of transactions online giving merchants more security and protection for their payment acceptance. And giving customers additional confidence that their personal and private data is secure. Many customers would prefer not to be required to enter their payment data multiple times or every time they want to make a purchase. With Tokens, merchants can offer their customers a more streamlined checkout experience by giving them the ability to save their payment data and personal information.

Another example of this method where you would most likely be utilizing tokens is with your utility, mortgage, or credit card companies. When you save your payment data and personal information for future payments these are called stored profiles. An associated payment token containing the user’s data for their account information is stored for future use. Once a customer has previously entered their payment data and personal information then requests a service, subscription, or recurring payment their data becomes a token and is then passed directly to the payment gateway to receive an authorization for payment in real-time.

The process of tokenizing payments also saves merchants time and money and headaches from PCI Compliance. Tokenization at the payment gateway level gives merchants their PCI Compliance without the overhead, infrastructure, internal training, penetration tests and audits of your security.

Learn How Tokenization Can Help Protect Your Business

You’ll find security all while processing payments and having the benefit of real-time synchronization with your QuickBooks data.  Save your business money and yourself time by contacting us to find out how tokenization helps protect you and your customers. Get started now by clicking the button below to requesting a free, no obligation demo of Instant Accept.

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