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Network Tokenization

Card tokenization is a process that replaces sensitive payment card information, such as credit card numbers, with a unique token. This token acts as a reference to the original card data, allowing merchants to securely store and transmit payment information without exposing sensitive details. The tokenization process enhances security, simplifies compliance with industry regulations, and provides a seamless experience for both merchants and customers during online transactions.

Use Case​

Consider an e-commerce merchant who wants to store customer card details for future purchases securely. Using card tokenization, the merchant can offer a convenient and secure way for customers to save their card information on their platform.

Workflow of Card Tokenization​

  1. Customer Inputs Card Information:

    • During the checkout process, the customer provides their credit card details on the merchant's website or mobile app.

  2. Tokenization Request:

    • The merchant's server sends a tokenization request to the payment gateway or a tokenization service, along with the customer's card information.

  3. Tokenization Process:

    • The payment gateway or tokenization service receives the request and processes the card information.
    • The sensitive card data is replaced with a unique, randomly generated token. This token is meaningless to anyone who might intercept it.

  4. Token Storage:

    • The tokenized card data (the token) is securely stored in the merchant's database. The merchant's systems never store or handle the actual card number, enhancing security and reducing the merchant's PCI DSS compliance scope.

  5. Transaction Reference:

    • For subsequent transactions, the customer uses the stored token as a reference instead of entering the complete card details. The token is sent to the merchant's server.

  6. Token Retrieval:

    • The merchant's server sends the token to the payment gateway or tokenization service for decryption.
    • The service decrypts the token and returns the original card details to the merchant's server for payment processing.

  7. Transaction Authorization:

    • The merchant's server sends the card details to the payment processor or issuing bank for transaction authorization.
    • If the transaction is approved, the payment processor processes the payment, and the transaction is completed.

Benefits of Card Tokenization​

  • Enhanced Security: Card tokenization ensures that sensitive card details are never stored within the merchant's environment, reducing the risk of data breaches.
  • Simplified Compliance: By limiting exposure to card data, merchants can simplify their compliance with PCI DSS requirements, a critical aspect of online payment security.
  • Convenience for Customers: Customers can make purchases with saved cards more easily, as they only need to use the token, reducing the need for repeated data entry.
  • Streamlined Transactions: Tokenization accelerates the payment process, making transactions faster and more efficient for both customers and merchants.
  • Flexibility: Merchants can offer subscription services, one-click payments, and recurring billing without compromising card security.

Card tokenization is a fundamental technology in online payment security, providing merchants and customers alike with a secure, efficient, and convenient method for handling payment transactions.