Tokenization is the way to prevent e-commerce security breaches




Tokenization is the one-way process of converting a credit card number into a unique value that by itself holds no value. Tokenization can be used to prevent actual credit card data from ever touching a retailer's server, where the majority of data breaches occur.

This can be achieved by having the customer's shopping cart submit card information to the merchant's processor along with a unique merchant identifier. The payment processor can then generate a token and send it back to the customer's cart. Once the shopping cart receives the tokenized payment information it can submit it along with other purchase information to the merchant who in turn passes the tokenized data back to the processor for payment authorization.

Many payments processors don't utilize tokenization for e-commerce, yet it's the most foolproof way for retailers to proactively protect themselves and their customer's card data with a high level of security. In addition, this form of tokenization can also assist merchants in reducing their Payments Card Industry (PCI) scope.

The e-commerce credit card transaction process incorporates many intricate steps. During a non-tokenized e-commerce transaction, the valuable card data essentially embarks on a journey, passing from customer browser to the e-commerce merchant's website, thru the merchant's network to the processor and then on to the card associations and the issuer. The most vulnerable stage of this process, and the place where credit information is historically at risk the most, is the retailer's server. By utilizing the tokenization previously described, it's possible for the card data to bypass the merchant server completely.




By tokenizing data before submission to the merchant the consumer can be assured that even if hackers break through a system and gain access to a merchant's server, they won't be able to obtain any sensitive information. If this type of system is in place and a breach does occur, the business will be able to focus on the system flaw that allowed the breach, without worrying about consumer information being in the hands of fraudsters.

Highest level of protection


Security is going to remain a hot topic as long as breaches continue to occur. Hackers aren't ever going to go away in the progressively digital age, but back-end processing technology can continue to fight by making it harder for them to walk away with the information they're looking for. Using e-commerce tokenization puts the best line of defense in front of payments technology, beating hackers at their own game.


This story, "Tokenization is the way to prevent e-commerce security breaches" was originally published by Network World.

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