Tokenisation is gaining popularity. But why? In today’s digital age, businesses are responsible for safeguarding a vast amount of sensitive customer data, especially when it comes to payments. As cyber threats become more sophisticated, ensuring the security of this data is paramount.
One of the most effective methods for protecting payment information is tokenisation. This technique has become a cornerstone for businesses aiming to secure both their own and their customers’ sensitive data.
For example, imagine online shopping. Every transaction would require the transmission of your full credit card number, exponentially increasing the risk of data breaches and identity theft. Therefore, the CC number is tokenised for better security, such that even with a breach, the hackers can’t get their hands on the actual CC number.
Let’s explore more about the concept of tokenisation, its benefits, workings, and implementation.
What is tokenisation?
Payment tokenisation is an extremely reliable security technique that replaces the sensitive information in a transaction with a random string of characters called “tokens.”
These tokens are responsible for keeping the transaction data safe because they only represent certain information, while the actual information is not revealed anywhere. Even if a cybercriminal gains access to these tokens, the characters would be totally random and meaningless for the hacker.
Its importance goes beyond just encryption; tokenisation fundamentally changes how sensitive data is stored and processed, reducing the risk of exposure and ensuring that even if a breach occurs, the critical data remains secure. This makes tokenisation a vital component in modern cybersecurity strategies, particularly for businesses handling large volumes of financial transactions.
<H2> How does tokenisation secure payment data?
Tokenisation may sound like a complex process, but it actually takes place within seconds in the following steps:
- Transaction Initiation: The customer initiates a transaction and provides the payment information, like the CC number.
- Data Transmission: The payment system sends this sensitive information to a tokenisation service, typically managed by a third-party provider.
- Token Generation: The tokenisation service then leverages a combination of complex algorithms to generate a unique token that represents the customer’s payment details.
- Secure Storage: The business then stores this token in its systems as a replacement for customers’ sensitive data to make it more secure.
- Transaction Processing: When a transaction is requested, the business can map the token data to the customer’s original payment information and process the payment securely.
For example, tokenisation is commonly used in online banking to protect sensitive financial information. For instance, when you save your credit card details for recurring payments on a streaming service, the actual card number isn’t stored. Instead, a unique token is generated and stored.
In case there is a breach, the compromised token cannot be used in any way to map back to the original data, thus keeping it safe.
Benefits of tokenisation
There are several benefits to using tokenisation for businesses:
1. Enhanced security
Using tokenisation, businesses can reduce the risk associated with storing sensitive customer data. Tokens replace all sensitive data with randomised characters that help ensure that payment data is not released even if tokens are breached.
2. Assured compliance
Businesses can easily adhere to industry compliance standards such as PCI DSS (Payment Card Industry Data Security Standard).
Tokens help minimise the storage and processing of sensitive customer data by replacing all that information with tokens or random values. In case of a breach, the compromised tokens can be destroyed and new ones generated.
3. Improved data management
Tokens are entirely reusable, making them suitable for efficient data management in organisations. For example, processing payment information can be made easier by generating reusable tokens that eliminate the need to process and store the same information repeatedly. It also helps to reduce the complexity of stored data and the work required to organise it.
4. Commerce unification
For businesses with omnichannel operations, tokenisation offers seamless integration of payment data across all platforms. Tokens unify payment information, simplifying backend processing and enhancing transaction efficiency. This leads to a smoother customer experience while ensuring that all transaction data is consistently managed from a single source.
How to implement tokenisation?
Implementing payment tokenisation in your organisation is straightforward:.
Here’s how you can do it:
- Choose a provider: The first step is to choose the right third-party tokenisation service provider. Companies like Plural by Pine Labs provide trustworthy and performant tokenisation services at reasonable prices.
- Integrate with PG: Once you have selected the service, you need to integrate the tokenisation engine with your payment gateway. This step ensures seamless communication between your payment system and the tokenisation service.
- Collect data and tokenise it: After the tokenisation service has been integrated with the payment gateway, they will start collecting customer details and tokenising them using the engine.
- Token storage: Once the tokens are generated, they must be stored in the organisation’s database so that they can be reused.
- Transaction and processing: When transactions occur, the payment gateway pulls token data from the database, maps it to customer details, and processes the transaction.
- Security: Your payment gateway should have all the necessary security measures, encryption methods, user authentication, and other safety mechanisms in place.
- Compliance: Ensure that the tokenisation service you partner with complies fully with all the industry standards applicable in your region.
Additionally, continuous monitoring and regular audits should be implemented to ensure that the tokenisation system remains secure and compliant with evolving industry regulations. It’s also important to educate your team on best practices for handling tokenised data and staying vigilant against potential security threats.
To wrap up
With the increase in digital transactions, robust security has also become important to ensure that cybercriminals have no opportunity to steal precious data.
To that end, tokenisation is an excellent method to reduce data breach risks by replacing sensitive information with meaningless, randomised characters that do not compromise data in any way.
If you’re serious about protecting your payment processes and enhancing your security framework, it’s time to take action. Partner with Plural by Pine Labs, a leader in payment technology and tokenisation services.
Connect with us today to explore how our advanced solutions can fortify your business, secure your customers’ data, and set you apart in the digital economy.
