Tokenized-payments

Credit card tokenization is gaining traction as a security measure, converting sensitive credit card numbers into non-sensitive tokens to protect cardholder data. This process allows merchants to securely store tokens for re-billing purposes without exposing actual credit card numbers, reducing PCI compliance burdens. Merchants should inquire with their service providers about tokenization services to enhance data security and streamline payment processes.

Amazon introduced PayPhrase, a service allowing customers to pay using a pin and phrase, accessing stored payment details without entering credit card numbers directly. This new service is similar to tokenized payments, emphasizing security by storing sensitive information on Amazon's servers. However, the article suggests that businesses could achieve similar tokenized payment solutions more affordably by using standard payment processors instead of Amazon PayPhrase due to potentially lower fees.

Visa has released best practices for data encryption to enhance cardholder data security, especially for businesses not utilizing tokenization. These guidelines advise limiting cleartext data, employing strong encryption and key management, and protecting cryptographic devices. Visa also recommends using alternative identifiers for recurring payments and other processes requiring account numbers post-authorization.

Tokenized payments utilize cloud computing to securely store customer payment data, replacing sensitive credit card numbers with tokens for transactions. This process involves sending customer information to a provider who returns a token, which is then used for future payments instead of the actual card number. Tokenization offers advantages like enhanced data security, simplified PCI compliance, reduced costs, and easier rebilling, and is offered by providers like Braintree, Cybersource, USAePay, and Stripe.