EMV Tokenization

EMV Tokenization definition

EMV tokenization is a security technology that protects cardholder information.

See also: security token, tokenization

Break down of the terms:

  • EMV: This stands for Europay, MasterCard, and Visa. The three companies that developed the standard.
  • EMV technology: A more secure method for authenticating transactions than magnetic stripe cards.
  • Tokenization: Replacing sensitive data with a unique series of numbers called a token. This token can then be used in transactions without exposing sensitive data. If a hacker intercepts the token, it is useless without the original data.

How EMV and tokenization work together:

  1. 1. A chip card (EMV) is used at a point-of-sale terminal. The transaction information converts into a unique code specific to that transaction. This protects sensitive information and against fraudsters creating counterfeit cards.
  2. 2. When the card information is stored or processed tokenization replaces the PAN with a token. It renders the data useless to hackers if they manage to access it.

Where EMV Tokenization is used:

  • Mobile Payments: Platforms like Apple Pay, Google Pay, and Samsung Pay use EMV tokenization. When you add a credit or debit card to these platforms, the card number is replaced with a device-specific token.
  • E-Commerce: When customers save their card details for faster checkout, the system keeps a token instead of the actual card details.
  • Card-on-File: Subscription-based platforms, utilities, and monthly memberships, store card details. Many of these businesses store tokens that represent the card details.
  • Point-of-Sale (POS) Systems: Modern POS systems use tokenization to secure in-store card transactions. When a customer uses their card at these terminals, the transaction is processed using a token.
  • Wearable Devices: Wearable tech that offers payments use tokenization. A token represents a card added to a wearable device.
  • Integrated Payment Solutions: Many businesses have integrated payment solutions. Their CRM, inventory management, and payment processing are linked. Tokenization ensures that cardholder data flowing through these integrated systems remains secure.
  • ATMs: Some modern ATMs that accept cardless transactions use tokenization.