What is Tokenisation as a service?

Although random, tokens carry sufficient elements of the original data so that processing can be done without any hindrances. A credit card represents the customer’s credit balance. However, it’s just a piece of plastic without the necessary authentication information. Similarly, a token represents sensitive information but is isolated from it.

While some might argue that data encryption takes care of sensitive data protection, tokenised data cannot be deciphered or reversed without separately stored data. As a result, a tokenisation breach doesn’t compromise the original information.

Read on to learn more about tokenisation as a service.

How is Tokenisation Done?

If you opt for a payment gateway that is a tokenisation service provider, these are the steps that are typically followed:

• Data Conversion - You export the sensitive data and share it with the tokenisation service provider. The service provider converts it into tokens.
• Data Replacement - The sensitive business data is extracted from the internal systems and replaced with tokens. In AI applications, large language models are used to carry out the tokenisation process.
• Token Usage - The business can now retain and use the tokens for various business operations. The exposure of sensitive information is no longer required.
• Data Storage - The original sensitive data of the business is now stored outside its internal systems by the tokenisation service provider.

Why Choose a Payment Gateway that Offers Tokenisation as a Service?

Tokenisation is seen as a breakthrough towards data security in many industries, including payments.

• Reduced Risk - A merchant using tokenisation can carry out tokenised payments without exposing the customer’s bank or card information. Any data breach would be futile, as the tokens cannot be used by cybercriminals to access the original personal information.
• Payment Flexibility - Tokenisation allows different payment requirements like in-app purchases, regular subscriptions, multiple gateways and so on. This enhances the payment experience for the customer.
• Easy Compliance - The merchant no longer needs to store sensitive information, as these are stored in secure servers by the tokenisation service provider. The tokenised data stored by the merchant is not within the scope of PCI DSS, which makes compliance easy and cost-effective.
• Faster Payments - Tokenisation means that your customers need not enter their payment information each time they transact. They can checkout of the transaction with a single click. For the merchant, recurring payments also become faster, and it becomes easier to identify repeat customers, offer incentives, and reward loyalty.
• Customer Confidence - With tokenisation, you are securing the sensitive information of your customers. It builds customer confidence in your business’s payment process.

Who Benefits from Tokenisation?

Financial institutions can use it as a tool for protecting large and sensitive customer data, and merchants can use it as a secure and efficient payment solution. Here are some of the businesses that can use tokenisation as a part of their payment processes.

• Financial Institutions - Organisations like banks and credit card companies can secure their customer data using tokenisation. This reduces their data handling complexity, eases compliance needs, and adds data safety.
• E-commerce and Marketplaces - By using tokenisation, e-commerce businesses and online marketplaces can store their customer data more securely. It will accelerate customer checkouts and reduce payment fraud. Tokenisation also has the potential to lower cart abandonment rates and processing costs.
• Subscription Businesses - Subscription businesses need customer data repeatedly. Tokenisation adoption by these companies will simplify their payment processing.
• Traditional Retail Businesses - For retail merchants, tokenisation makes their business integrated into new payment technologies. It is also scalable, allowing the business to adopt new payment technologies. Besides, customers get a wider and safer choice while making payments.
• Travel and Tourism - Travel and tourism businesses receive customer data from various websites and app-based sources. Tokenisation makes it easier for these businesses to accept and secure this information.

If your business is suited for tokenised payments, you should choose a payment solution provider that offers you the necessary safety and flexibility. As a merchant, you should also carry out an in-depth evaluation and risk assessment before selecting your tokenisation partner.

The Worldline tokenisation service ensures that tokenised payment systems and processes are strongly protected through robust security controls and regular monitoring. Tokens provided are capable of being used across different merchant sales channels with minimal modifications. Worldline tokenisation is available in single-use and multi-use options that are compliant with PCI data security standards. Businesses of all sizes across different industries are opting for Worldline payment solutions, with tokenisation becoming an increasingly popular choice.

If you are looking for tokenisation, and a host of other business-specific payment solutions, explore Worlldine solutions today.

Sources - Fortune Business Insights