If you have come across Apple Pay, then it is quite likely that you would have heard about tokenization. The fast development of mobile payments also has given a new thrust, meaning, and direction to token payment systems. Though the whole concept might look new, there is no doubt that token payments have been around since 1976 and have been used for various types of data processing. However, the mobile phone payment systems have given a new breath of life as far as tokenization is concerned. It is today becoming a hot topic and there are obviously many reasons for this. But these are still early days and there is quite a bit of confusion surrounding these token payment systems. Many of us are not aware that there is a difference between tokenization and encryption. Further, they are also not fully aware of the presumed benefits surrounding tokenization. The issues pertaining to security and safety and other such business considerations also are not fully clear.
What Exactly Is Tokenization?
How Is It Different From Card Data
When we choose tokenization credit card over card data, we do not have to carry the risk of mentioning the PAN or primary account numbers. This is replaced by a token which is a unique and long string of characters. This represents the original data but for the ordinary viewers, it has no value or meaning. This is one of the main reasons as to why tokenization is becoming so valuable for businesses. Should your online token be stolen by some cyber-thieves, they will not be able to do anything much with it. They will just have a list of long numbers which make no sense at all to them. The long list of numbers is so thoroughly encrypted that even the best of cyber hackers will not be able to make anything much out of it.
How Is Payment Make Using A Token?
When payments are made using debit or credit cards tokenization, we have to input three details. The first is the 16 digit card numbers, the expiry month and year and the security code which is available on the reverse of the card. With the help of tokenization, all the above three can be encrypted and the details will not be visible to the naked eye. Though you will be entering the details at your end when making payment, it will travel to the seller in a tokenized and encrypted form making it impossible for anyone in the interim journey to get any details about the same.