What is card tokenisation?

Tokenisation is a term that is quite common in the world of payments. Card tokenisation is only becoming more important too, as more and more companies shift towards mobile payments. 

While the importance and use of card tokenisation are increasing, it is surprising how little people know about it (particularly given how important it is when paying for most items nowadays). In this article, we discuss what is card tokenisation, how it works, and how it is used.

Card Tokenisation vs. Data Encryption

Both tokenisation and encryption are used to reduce the scope of PCI Compliance by reducing the number of systems that have access to customers’ credit card information. While both have their places in payment technology, tokenisation is fast emerging as a more cost-effective and secure solution to protect customer card information. Unlike data that is encrypted, tokens are not mathematically reversible with a decryption key and PAN data is never displayed.

An Example

Tokenisation helps protect your online shopping activities. When you buy something online, if that e-commerce retailer keeps the tokenized card numbers on file, your information is safe even if it gets hacked. You can have a look at our previous article to learn how tokenisation works in more detail. Essentially, once you submit your card details, they are replaced by a set of randomly generated digits called a token. Nobody will get to see your original card details and, even if criminals try to access the token, they won’t be able to trace it back to the original digits.  Card tokenisation is therefore a great tool to improve online security. 

Card Tokenisation with Apple Pay

Once you load your card details into your iPhone, Apple sends the details to the card’s issuing bank or network. The Issuing bank or payment network then replaces your card details with a series of randomly generated numbers (the token). These are the numbers that will be stored in your Apple Pay wallet.

This means that if somebody managed to get into your phone, they would only be able to access the token and not your actual card details. The Android digital wallet works similarly. Once you insert your card details into the wallet, Google will tokenise those details and store only the token. 

Card Tokenisation within Apps

When you purchase a product or service through an app and use your digital wallet to pay for it, the company you purchased from will never access your actual card details.  That means that your bank information is locked down and meaningless to fraudsters. This puts customers in a much safer position, particularly if they tend to do most of their shopping through apps. 

Card tokenisation is a complicated topic, but a topic that is worth knowing a bit about, nonetheless. Card tokenisation is a great way to protect your payment data and keep all transactions as secure as possible, by hiding your details from the likes of fraudsters.

For more information about protecting your business and customers data when managing their payments, contact Imburse today about our payments as a service.

How Imburse can help

Imburse offers connectivity to the entire payments ecosystem. By connecting to Imburse, you can deploy any payment provider or method, in any market, into your existing IT system. We do all the heavy-lifting so you can focus on other critical business areas whilst saving money, time and resources. Imburse works as your payment integrations partner, taking care of the time-consuming, expensive and complex integration processes for you.

With our marketplace, you can enjoy the freedom of being able to quickly and easily adapt to your customers and business needs. Our marketplace also offers all the payment functionalities you need to optimise your payments systems, including mandate management, tokenisation and smart routing. Reach out to our team below should you want to discuss how Imburse can help you. Our team is happy to show you what our platform can do for your business and offer you a free demo.