5 Important Facts About Tokenization

And how to know which approach is right for you

With the rising rates of credit card fraud and cybercrimes, many companies are trying to increase the security of payments. A growing solution to increase payment security is tokenization. Here are five key things you should know about tokenization:

  1. Why Tokenization? Tokenization helps minimize risk and cost. According to the Ponemon Institute, there is a 20% chance that a merchant will experience a data breach within the next two years. To prevent this, merchants must follow the PCI DSS guidelines to protect cardholder information. Tokenization meets these standards when it is provided by a PCI-compliant vendor.
  2. How does it work? Tokenization replaces every credit card number stored in enterprise systems with a series of randomly-generated codes that are of no value to hackers. Therefore, when a hacker breaches a payment database and attempts to steal payment information, the merchant and its customers’ information is still secure.
  3. Which type of Tokenization is right for me? There are three types of tokenization: On-premise, Hosted and Cloud. To determine which type is right for you, consider your location, costs, PCI DSS audit scope responsibility, scalability, redundancy measures, backup and recovery methods.
  4. Other selection considerations? Select a solution with an eye to the future.
  • Choose a processor-agnostic tokenization solution to manage future growth
  • Select multi-use instead of single-use tokenization which enables more streamlined reporting and easier customer service
  • Use the same form of tokenization in both QA and production
  • Choose a vendor offering proprietary tokenization technology
  1. How do I make the most of tokenization? Cover all your bases in the solution design phase.
  • Identify risk workflows
  • Convert sensitive raw or encrypted data to tokens and then purge the original data to reduce risk
  • Block your users from viewing de-tokenized card numbers
  • Train your representatives to not enter raw card numbers in text fields
  • Prevent the storage of CVV values

 

By deploying tokenization, you can minimize the risk of a data breach and minimize the scope of a PCI audit. To learn more, read Paymetric’s eBook on the benefits of tokenization.