The ability to store and transmit credit card information safely is a major concern for merchants and credit card holders alike. While PCI compliance ensures that your merchant account service provider is taking the appropriate measures to reduce the risk of fraud, tokenization takes security one step further by removing valuable credit card information completely out of the process. Hackers can’t steal your data if the data isn’t even there.
So how exactly are payments and purchases made without the necessary credit card information to transmit? Tokenization involves replacing data with a “token,” or coded reference pointer, whether through a point-of-sale terminal or online payment interface. The new coded data is then transmitted and stored throughout the credit card payment process.
What this means for credit card holders: Customers make their purchases as usual, while behind the scenes, their credit card information becomes nothing more than a token that is useless to hackers.
What this means for merchants: While your customers’ credit card information is kept safe from thieving hackers, increasing your integrity as a trustworthy source of business, tokenization protects your company from potential law suits regarding compromised information. The merchant processes a token and never actually has access to the customer’s information, reducing business liability.
For businesses who wish to process credit cards, debit cards and check payments, tokenization is critical for maintaining security.