In the early 2000s, the Payment Card Industry (PCI) introduced its Data Security Standard (PCI...
What is Credit Card Tokenization?
Credit card tokenization is an advanced technique designed to protect sensitive cardholder data from potential security breaches. It works by converting the original data into a unique and random sequence of numbers, which is referred to as a "token."
The primary benefit of tokenization is that it renders the original data unreadable, even if it is intercepted by unauthorized parties. Unlike encryption, which can be reversed, tokenization is irreversible. As a result, sensitive data is fully protected and secure.
One of the most significant advantages of credit card tokenization is that it allows businesses to store tokenized credit card data within their cardholder data environment without violating the Payment Card Industry Data Security Standards (PCI DSS). This enables organizations to maintain PCI compliance while keeping their customers' data safe.
Moreover, tokenization can be implemented in a format- and length-preserving manner, enabling businesses to retain much of the original sensitive cardholder data's business utility. This approach minimizes the need for extensive changes to existing business processes, which ensures a smooth transition to the new system.
How Does Credit Card Tokenization Work?
Basis Theory employs a technique that involves generating random data called tokens to tokenize a credit card. This process replaces the sensitive credit card data with a nonsensitive credit card token number, which is stored safely outside your environment, while the original data is removed from your internal systems.
The primary benefit of using Basis Theory is that it eliminates the need to store customer credit cards within your internal systems. By swapping the credit card data, specifically the primary account number (PAN), with a token, you can significantly reduce the risks associated with storing sensitive data. You can also securely send credit card data to any endpoint using our Proxy Gateway. This approach allows you to seamlessly integrate with various endpoints while maintaining a high level of security and compliance.
Overall, credit card tokenization is a highly effective and innovative solution for protecting sensitive cardholder data. Its benefits include:
- enhanced security
- compliance with PCI DSS
- minimal disruptions to existing business processes
How can credit card data be captured using tokenization?
In a browser-based application an iFrame can be used to collect cardholder data directly from the fields of the checkout page, which helps to minimize the scope of PCI DSS compliance and mitigate risk by preventing data from entering the cardholder data environment. Tokenization can be used alongside credit card processing, maintaining the look and feel of the website's checkout page.
In mobile, cardholder data can be captured from mobile applications on Android or iOS devices, whether the applications are native or web-based. The credit card information is collected using either the iFrame in browser-based scenarios or using components in mobile SDKs to capture, encrypt, tokenize, and store the data securely.
In call centers, Basis Theory can integrate with various technologies such as point-to-point encryption (P2PE), interactive voice response (IVR), and dual-tone multifrequency (DTMF) to tokenize sensitive payment data. This approach removes the credit card information in systems downstream from the call center environment, reducing the organization's compliance scope and alleviating the need to store sensitive credit card data in internal systems.