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What does Tokenisation Mean?

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What is Tokenization?

Tokenization in payments is a method of sending sensitive information online by making the data undecipherable through the use of nonsensitive placeholders that are also called “tokens”. 

Specific to payments, tokenization is used to safeguard a credit or debit card’s primary account number (PAN) by replacing it with a unique set of numbers. 

Through this process, merchants can add an extra layer of safety to the payment process that protects sensitive card data. 

How does Tokenization Work?

The Opayo token system works with both SERVER and DIRECT methods of integration. Through this, shoppers will be able to register their card on our system to use for future purposes. 

For SERVER integration, a token can be registered by your system performing a registration post to Opayo. This will then result in the customer being transferred to our payment pages, where their card details will be captured on our secure system and a token provided to your system in place of the entered card details. 

For a DIRECT integration, you will need to capture the card details of the shopper on your own website page. Then you can send all of the information through to Opayo and we will send you a token in place of the details. 

If you would like further information on the tokenization process, take a look at our page. 

Benefits of Tokenization

Tokenization can be a fantastic way of protecting sensitive data. There are several benefits to consider when making the switch to token payments. 

Secure from data breaches - As all customer card details are stored with us on our secure system, you can rest easy with the knowledge that your customer data is protected all year round. 

Increased customer retention - Speeding up the payment process is always a bonus for customer retention. Shoppers often dislike having to enter card details multiple times, so if they register their card details for future use, they are guaranteed a smooth checkout each time they make a purchase. 

One click payments - Payment at a click has never been easier. With a customer’s card details stored through us, the transaction can occur faster and more conveniently than ever before. 

Tokenization vs Encryption

Tokenization and encryption are both commonly used methods of keeping sensitive information secure, such as personal information, credit card information and more. While both technologies are essential tools for protecting data, there are benefits and drawbacks to each. 

Tokenization

  • Tokenization significantly reduces the risk of data theft.

  • All personal or sensitive data is securely stored in the cloud.  

  • Cloud-based tokenization offers increased flexibility to merchants, all at a lower cost than on-premise alternatives. 

  • Stolen tokens are essentially useless to hackers as they cannot be matched up to the original Primary Account Number (PAN). 

Encryption

  • Encryption uses a key to protect sensitive data. 

  • This method of data protection is ideal for unstructured fields and databases of information that is not exchanged frequently. 

  • The strength of the encryption is based on the complexity of the algorithm used to secure the data. 

A major issue with data encryption is that it is entirely reversible. This means that if the key is accessible, the encrypted data can be reverted to its unencrypted form. Because of this, data encryption can not be entirely trusted upon to store secure information. 

Tokenization alternatively has none of these issues as it does not rely on encryption to protect the data. Instead of storing information though an algorithm, tokenization replaces private information with randomly generated data mapped one to one. The original information is therefore not contained in the token so it cannot be reversed back to the form it once was in. 

Conclusion

Opayo is one of the UK’s most trusted payment providers. We aim to offer payment solutions that are tailored to match your business requirements, big or small. 

Implementing a token system can have a significantly positive impact on collecting payments, increasing the speed of the process as well as the security of the data stored. 

If you would like to find out more about the tokenization process take a look at our ebook. Alternatively, you can contact the Opayo team for further help and advice. We are available 24/7, 365 days a year to address any queries or concerns that you may have.