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Credit card tokenization

Automatic tokenization of credit card transactions

What is card tokenization?

Tokenization is a process of replacing sensitive data with non-sensitive data. In the payments industry, we use it to safeguard a card’s PAN. We replace it with a unique string of numbers.

How does credit card tokenization work?

The credit card token itself is the unique string of numbers – a secure identifier generated from a PAN. Credit card tokens are automatically issued in real-time and used online in predefined domains and/or payment environments.

Therefore, tokenized payments are payments in which the PAN is substituted by a token while performing a credit card transaction. With tokenized payments, the PAN is not transmitted during the transaction, making the payment more secure. This is the key strength of tokenization as a security measure.

Since the PAN is never compromised, there is very little possibility that the token can be used for fraudulent activity – even if a data breach occurs and payment tokens are accessed.