Tokenization is a process of replacing sensitive data with a unique identifier called a token. Unlike encryption, where the original data can always be decrypted, tokens cannot be mathematically reversed.
Merchants, in particular, would benefit from the widespread use of tokenization in the payments industry as it would remove the requirement that they meet four PCI compliance clauses that introduce considerable overhead and risk into their operations today.
1. Requirement – Install and maintain a firewall configuration to protect cardholder data Reason: Firewalls will continue to be the dominant end-point security device. However, as cardholder data will no longer be stored in the environment, a dedicated firewall is not required to protect it.
2. Requirement – Protect stored cardholder data Reason: The responsibility of protecting cardholder data would reside with the provider of the tokenization services.
3. Requirement – Encrypt transmission of cardholder data across open, public networks Reason: The provider of the tokenization services would tokenize the data and be responsible for transmitting the data across a secure network.
4. Requirement – Restrict physical access to cardholder data Reason: With tokenization, cardholder data would be stored with the token provider. Merchants would no longer be able to physically access the data
To help merchants benefit from tokenization, several third party organizations and payment networks are providing Tokenization-as-a-Service (TaaS) solutions. For example, CyberSource offers Hosted Payment Acceptance, which allows merchants to accept and process payments without payment data entering their systems. CyberSource hosts the payment data fields so that data is captured and transmitted outside of the merchant’s environment, then sent directly to the payments network. Others, such as SafeNet, also provides similar such TaaS solutions.
RS Software has focused exclusively on the payments industry since 1991 providing the expertise and solutions its clients require to address an industry undergoing a transformation. That is why when the world’s largest payments network wanted to be a Token Service Provider (TSP), they turned to RS Software to introduce Tokenization-as-a-Service to its issuers and merchants.