Tokenization Explained

It has become apparent that PCI DSS tokenization has started affecting businesses processing payments in a manner we could have never dreamed of. Big banks have marketed the use and connivence of credit cards and debit cards to the point that consumers are less and less likely to carry cash and check writing is almost a thing of the past. The processing of digital currency ahas led to may great things, but has also become a bit of liability in regards to security. There are many uses for encrypted currency and tokenization, which has prompted discussions within the online communities on how to reduce the impact that PCI DSS tokenization can have on a business.

Keeping Your Clients Data Safe

Passing off the responsibility of processing customer/client payments on your network and onto another just might be the #1 way for your business to free yourself from liability and keep your clients/customers data safe and secure. Tokenization is the process of replacing client/customer credit and debit card information with proprietary strings of encrypted data that can not be reversed engineered. Meaning, if this sensitive data were to fall into the hands of criminals, the data packets could not be revealed. Tokens store the last few digits of a credit/debit cards information so that the card can be identified for processing, this gives businesses the ability to setup recurring billing cycles on their own servers without having to store complete card numbers.

 

The PCI DSS Tokenization 3 Step Process As Referenced From PCISecurityStandars.org

Assess: Identifying cardholder data, taking an inventory of IT assets and business processes for payment card processing, and analyzing them for vulnerabilities.
Remediate: Fixing vulnerabilities and eliminating the storage of cardholder data unless absolutely necessary.
Report: Compiling and submitting required reports to the appropriate acquiring bank and card brands.

 

PCI Tokenization vs. Encryption

Tokenization was not developed to replace encryption. They both have their own unique purpose in regards to online security. In my opinion PCI DSS tokenization seems to be a more secure alternative however to encryption. Tokenization however can be very taxing on networks and hardware, at the end of the day it does require more resources and a greater financial commitment from the business looking to provide and process on site tokenization services. Tokenization should be the preferred method however for extremely high risk data like credit cards and banking information. Data can also be stored in cloud based shells offsite.