Many have heard about tokenization, but a few understand what it entails.
Tokenization is a technological application that helps to secure consumer credit card information from hackers and thieves. This security measure works by protecting customer data when they swap their credit or debit cards at any checkout counter. This technology replaces the personal account numbers (PANs) in the payment system of the merchant with a randomly generated token ID.
When the transaction is successful, the processor for payments sends a confirmation back to the merchant with the token ID that was randomly generated. The number is stored, instead of the PAN data, in the merchant’s system. The entire system makes it impossible for third parties to access any personal information belonging to clients.
As a business owner, tokenization brings more to the table than the time you’ve taken to consider. In addition to data protection, you can save many funds, which can be used for other activities. Do you want to learn why tokenization is so important to merchants?
Complies with regulations
To operate any business, one needs to comply with specific rules set to protect both the customer and the business owner. This includes becoming PCI-compliant. Tokenization is much cheaper compared to many resources used to protect sensitive customer information. It also makes it easier for PCI audits that can take up a lot of time and money.
Tokenization is quick and cheap compared to other security systems. It’s relatively easy to set up, and one doesn’t need additional hardware for it to operate. This is because most of the changes take place inside the payment processor. The entire process saves your business a lot of money which makes upgrades a worthwhile investment.
Anonymous criminals aren’t the only ones that pose a danger to your business. You need to protect information that’s sensitive from those in your organization. This is from employees, suppliers, and even vendors. Because tokenization randomly generates token IDs, no person will be able to access any information from your systems. Eventually, you’ll end up saving funds that go into settling court cases.
Despite the many advantages of online transaction, protection is a significant threat to this industry. Traditional transitions allow customers to take precautions, like using EMV and other protective measures, to protect their personal information. However, with tokenization, one doesn’t need extra protection measures to allow transactions from any part of the world.
Tokenization works with many other technologies. In addition to credit card plastic, it also works with NFC payments, gift cards, ACH transfers, and Apple Pay. No matter what customers use, you can protect their data. You can also attract new clients referred to you for your security measures.
Wide range of uses
The tokenization technology can be used in many areas to protect customer data. Apart from financial information, tokenization can be used to protect patient records in hospitals, email addresses, usernames and passwords, employee files, and other sensitive information. You can use this technology for other businesses you might have in mind.