You have heard about tokenization or tokenization in
payments, let me explain what tokenization in payments is “Merchants who accept card details on their payment page,
can send the card number and expiration date to some third party (token
provider) via a web service (or any other API) and in response merchant will
get a token number against the card details, this token number can be used in
future to get the actual card number and expiration date from the same token
provider” The token number is generated by such algorithms that card details
cannot be derived from token number.
At an abstract level tokenization can provide a merchant
with
1 1) Increased online sales: Express checkout or one
click checkout can be achieved using tokenization. This improves the checkout
process dramatically by reducing the checkout time and added security; this
also decreases the chances of transaction failure due to invalid card details. These
kinds of services also promote the customer to return to merchant page for
future requirements.
2 2) More security and reduced PCI DSS scope, as
merchant is not storing card details on its system, so will be the reduced PCI
DSS scope, and no fear of losing card details in a security breach.
3 3) Use of card details: Many online merchants usually
have integration with more than one payment gateway, if tokenization system is independent
of these payment gateways then the same card details can be used in any number
of payment gateway. This provides the merchant with better flexibility and
control.
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Any questions and comments are appreciated. Thanks for reading
