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Tokenization Payment Technology Guide

The document discusses tokenization technology which replaces sensitive payment data with unique tokens to make transactions more secure. It works by generating tokens from primary account numbers to use for payments instead of transmitting the actual numbers. This allows merchants to securely store tokens to enable features like one-click payments while protecting sensitive data if a breach occurs.

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68 views2 pages

Tokenization Payment Technology Guide

The document discusses tokenization technology which replaces sensitive payment data with unique tokens to make transactions more secure. It works by generating tokens from primary account numbers to use for payments instead of transmitting the actual numbers. This allows merchants to securely store tokens to enable features like one-click payments while protecting sensitive data if a breach occurs.

Uploaded by

vignesh_march1994
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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Tokenization

Payment technology guide

Many businesses are working towards making the checkout stage of the shopper journey as seamless as possible through
enabling options such as one-click payments. However, to do this, payment data – particularly the PAN (Primary Account
Number) – needs to be stored so it can be accessed for future transactions without the shopper having to re-enter card
information. And this presents a challenge: How to store this sensitive data in a secure way?

The answer to this lies in tokenization, a major industry technology that is shaping the way merchants accept payments and use
payment data across online and in-store.

How tokenization technology works


Tokenization is a process of replacing sensitive data with Therefore, tokenized payments are payments in which the
non-sensitive data. In the payments industry, it is used to PAN is substituted by a token while performing a payment
safeguard a card’s PAN by replacing it with a unique string of transaction. With tokenized payments, the PAN is not
numbers. transmitted during the transaction, making the payment more
secure. This is the key strength of tokenization as a security
The payment token itself is the unique string of numbers – a measure. Since the PAN is never compromised, there is very
secure identifier generated from a PAN. Payment tokens are little possibility that the token can be used for fraudulent
automatically issued in real time and used online in predefined activity – even if a data breach occurs and payment tokens are
domains and/or payment environments. Examples include: accessed.
only e-commerce, only for a specific merchant(s) and so on.

www.adyen.com
Adyen Tokenization Service

Tokenized PAN
Payment

Cardholder Merchant Adyen Card Scheme Network Issuer

The tokenization payment flow Benefits for merchants


Adyen’s tokenization service securely stores customer card There are a number of benefits to tokenization for merchants
data and generates a token that can be used by the merchant • Cost savings: Tokenization by Adyen takes on the burden of
to charge subsequent purchases, as shown in the diagram managing cardholder data storage in a secured way, thus
above. Other Token Service Providers (TSPs) generate their reducing the costs involved with meeting and monitoring
own tokens. This is the case for the major card schemes and Payment Card Industry (PCI) compliance.
Apple Pay. • Increased security: If fraudsters manage to steal tokenized
data, they cannot use the stolen tokens to pay online since
As an acquirer, Adyen is able to process tokenized payments for they are unable to link the token to payment information
online and/or contactless payment methods. A good example of stored securely by the payment partner.
this is Apple Pay, which uses payment tokens both for online and • Enabling one-click (or even “0-click”) payments for shoppers:
(contactless) in-store transactions. Tokenization enables merchants to offer shoppers the
possibility to save their payment details it in a secure
Who it’s for manner, so that the next time they make a purchase they
Tokenization is suited to any businesses with subscription- based do not need to re-enter their payment data. One-click
business models or which generate significant business with repeat payments significantly increase conversion at he checkout
customers. Because tokens can be securely stored, and used to page through streamlining they payment process for
enable “one-click” payments for future transactions, tokenization shoppers.
is of particular interest to businesses that aim to give as smooth a
shopper flow as possible at the checkout stage.

www.adyen.com

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