Marcel van Oost’s Post

How Network Tokenization works for Card Not Present Transactions👇 First; What is network tokenization? Tokenization is the process of replacing the value of sensitive payments details with unique identifiers (tokens). These values can't be decrypted since they're not encrypted to begin with. Service providers generate and store tokens to secure card data, but the only point of card info insulation is during the hand-off from merchant to service provider & vice versa. Card networks take it a step and insulate that card data through most of the payment process, all while further bolstering layers of security. Rather than tokens being issued through the service provider, network tokens are issued through the card network (i.e. Visa, Mastercard, AmEx). After a token has been issued, every subsequent transaction by that customer will use the same network token across the entire payment ecosystem. The only point where actual PAN data is exchanged is between the card network and the issuer. ► Here's what the process for provisioning network tokens looks like: Initialization: Customer enters card details (PAN, CVV, expiration date) Requesting Token: The merchant sends card details to service provider (token requestor), who then sends those details to card network Token Generation: Card network sends request to issuer, who then validates & sends back to card network. Token is generated for that customer, with that PAN, at that merchant, then sent back to service provider. Storing Token: Service provider shares the network token with the merchant (if they are the token requestor) for future transactions by that customer, or stores it themselves After the token has been provisioned, all future transactions by that customer will use that specific token. ► Benefits other than "more layers of security"? Involuntary Churn: For subscription-based merchants, network tokens are persistent. This means that merchants will always have an active card on file even if the customer replaces the card, reducing churn. Cost Reduction: Card networks are likely to reduce interchange costs per transaction for card-not-present transactions that use network tokens. Liability shifts from the merchant to the issuer, so incentivization of use is the natural next step. Fraud Reduction: Network tokens significantly reduce fraud by insulating the card details at every step of the transaction (aside from card network & issuer hand-offs) AND adding a cryptogram for that particular transaction. The merchant doesn't have to handle a customer's sensitive data. Network tokenization is big deal to merchants that want to increase auth rates, reduce churn, or simply insulate payment security points of failure. Source: ACI Worldwide’s all Starr Ali Ahmed (I highly recommend following Ali for more great updates like this one👌) #fintech #tokenization #financialtechnology #fintechindustry #payments #paytech #digitalpayments  

How Network Tokenization works for Card Not Present Transactions👇 First; What is network tokenization? Tokenization is the process of replacing the value of sensitive payments details with unique identifiers (tokens). These values can't be decrypted since they're not encrypted to begin with. Service providers generate and store tokens to secure card data, but the only point of card info insulation is during the hand-off from merchant to service provider & vice versa. Card networks take it a step and insulate that card data through most of the payment process, all while further bolstering layers of security. Rather than tokens being issued through the service provider, network tokens are issued through the card network (i.e. Visa, Mastercard, AmEx). After a token has been issued, every subsequent transaction by that customer will use the same network token across the entire payment ecosystem. The only point where actual PAN data is exchanged is between the card network and the issuer. ► Here's what the process for provisioning network tokens looks like: Initialization: Customer enters card details (PAN, CVV, expiration date) Requesting Token: The merchant sends card details to service provider (token requestor), who then sends those details to card network Token Generation: Card network sends request to issuer, who then validates & sends back to card network. Token is generated for that customer, with that PAN, at that merchant, then sent back to service provider. Storing Token: Service provider shares the network token with the merchant (if they are the token requestor) for future transactions by that customer, or stores it themselves After the token has been provisioned, all future transactions by that customer will use that specific token. ► Benefits other than "more layers of security"? Involuntary Churn: For subscription-based merchants, network tokens are persistent. This means that merchants will always have an active card on file even if the customer replaces the card, reducing churn. Cost Reduction: Card networks are likely to reduce interchange costs per transaction for card-not-present transactions that use network tokens. Liability shifts from the merchant to the issuer, so incentivization of use is the natural next step. Fraud Reduction: Network tokens significantly reduce fraud by insulating the card details at every step of the transaction (aside from card network & issuer hand-offs) AND adding a cryptogram for that particular transaction. The merchant doesn't have to handle a customer's sensitive data. Network tokenization is big deal to merchants that want to increase auth rates, reduce churn, or simply insulate payment security points of failure. Source: ACI Worldwide’s all Starr Ali Ahmed (I highly recommend following Ali for more great updates like this one👌) #fintech #tokenization #financialtechnology #fintechindustry #payments #paytech #digitalpayments  

How Network Tokenization works for Card Not Present Transactions👇 First; What is network tokenization? Tokenization is the process of replacing the value of sensitive payments details with unique identifiers (tokens). These values can't be decrypted since they're not encrypted to begin with. Service providers generate and store tokens to secure card data, but the only point of card info insulation is during the hand-off from merchant to service provider & vice versa. Card networks take it a step and insulate that card data through most of the payment process, all while further bolstering layers of security. Rather than tokens being issued through the service provider, network tokens are issued through the card network (i.e. Visa, Mastercard, AmEx). After a token has been issued, every subsequent transaction by that customer will use the same network token across the entire payment ecosystem. The only point where actual PAN data is exchanged is between the card network and the issuer. ► Here's what the process for provisioning network tokens looks like: Initialization: Customer enters card details (PAN, CVV, expiration date) Requesting Token: The merchant sends card details to service provider (token requestor), who then sends those details to card network Token Generation: Card network sends request to issuer, who then validates & sends back to card network. Token is generated for that customer, with that PAN, at that merchant, then sent back to service provider. Storing Token: Service provider shares the network token with the merchant (if they are the token requestor) for future transactions by that customer, or stores it themselves After the token has been provisioned, all future transactions by that customer will use that specific token. ► Benefits other than "more layers of security"? Involuntary Churn: For subscription-based merchants, network tokens are persistent. This means that merchants will always have an active card on file even if the customer replaces the card, reducing churn. Cost Reduction: Card networks are likely to reduce interchange costs per transaction for card-not-present transactions that use network tokens. Liability shifts from the merchant to the issuer, so incentivization of use is the natural next step. Fraud Reduction: Network tokens significantly reduce fraud by insulating the card details at every step of the transaction (aside from card network & issuer hand-offs) AND adding a cryptogram for that particular transaction. The merchant doesn't have to handle a customer's sensitive data. Network tokenization is big deal to merchants that want to increase auth rates, reduce churn, or simply insulate payment security points of failure. Source: ACI Worldwide’s all Starr Ali Ahmed (I highly recommend following Ali for more great updates like this one👌) #fintech #tokenization #financialtechnology #fintechindustry #payments #paytech #digitalpayments  

Network Tokenization is an evolution in payment card data protection and transactional services for remote commerce and wallet-based transactions 👇 Network Tokenization (NT) is an industry standard published by EMVCo. First introduced with the launch of ApplePay and the payment networks, NT is gaining traction in the Card on File and wallet markets. Processor vs Network Tokens: 🔸Processor Tokenization is a proprietary service offered by PSPs (i.e. Nuvei), Acquirers (i.e. Chase) and Processors (i.e. Stripe) to minimize a merchant’s PCI scope. The generated token, which is a replacement for a Personal Account Number (#PAN), is restricted to the merchant and PSP limiting its value in the event of a data breach. 🔸Network Tokenization goes further by generating tokens in cooperation with the Card Issuer and Card Network (i.e. Visa & Mastercard) to offer additional benefits to the merchant and protect the PAN throughout the value chain. This new Tokenization process has some serious benefits for merchants: 🔸Cost Optimzation - Merchants can optimize costs with Visa’s pricing changes. Security and compliance costs can be reduced since NT reduces the scope of PCI DSS. 🔸Reduced Fraud - Implementing NT offers a higher level of security for CNP transactions. The impact of any potential data breach is greatly reduced since the data is useless when stolen (i.e. 26% decline in overall Fraud rates). 🔸Improved Authorization Rates - NT involves card issuers unlike processor tokenization. Network tokens can be limited in scope and offer additional detail about the payment (i.e. 2.1% increase). 🔸Better Customer Experience - Card issuers can update network tokens in real time replacing the need for card members to update the information periodically (i.e. 35% of cardholders stop shopping after one decline). Network Tokenization can be incorporated across all channels with a few minor tweaks 👇 👉 Website - Token information is captured by the merchant and shared with the Token Service Provider and Card Issuer to validate the token and authenticate the transaction. Card Issuer then shares PAR along with the token to complete the transaction. 👉 In-App - Token information is shared from the digital wallet with the token service provider and card issuer to validate and authenticate the requests. Card Issuers authorize the transaction and share customer PAR information back to the merchant PSP along with the token. 👉 In-Store Cards - The Payment Terminal captures the card data and shares it with the card issuer to authorize the transaction. Card issuers authorize transactions and share with merchants the response and PAR while the processor provides the Processor Token. Source: Deloitte and their report “Network Tokenization for Merchants” —— ✍️ Sign up to The Payments Brews ☕️: https://lnkd.in/g5cDhnjC ✍️ Follow Connecting the dots in payments... & Marcel van Oost #tokens #payments #globalpayments #cardnetwork #technology

Processor 🆚 Network Tokens 𝐓𝐡𝐞 𝐢𝐦𝐩𝐚𝐜𝐭 𝐨𝐟 𝐍𝐞𝐭𝐰𝐨𝐫𝐤 𝐓𝐨𝐤𝐞𝐧𝐬 𝐢𝐧 𝐏𝐚𝐲𝐦𝐞𝐧𝐭𝐬: 𝐍𝐞𝐭𝐰𝐨𝐫𝐤 𝐓𝐨𝐤𝐞𝐧𝐢𝐳𝐚𝐭𝐢𝐨𝐧 (𝐍𝐓) is an industry standard published by EMVCo. First introduced with the launch of ApplePay and the payment networks, NT is gaining traction in the Card-on-file and wallet markets 𝐏𝐫𝐨𝐜𝐞𝐬𝐬𝐨𝐫 𝐯𝐬 𝐍𝐞𝐭𝐰𝐨𝐫𝐤 𝐓𝐨𝐤𝐞𝐧𝐬: ▶ Processor Tokenization is a proprietary service offered by PSPs, Acquirers, and Processors to minimize a merchant’s PCI scope. The generated token, a replacement for a Personal Account Number (PAN), is restricted to the merchant and PSP limiting its value in the event of a data breach ▶ Network Tokenization goes further by generating tokens in cooperation with the Card Issuer and Card Network (i.e. Visa & Mastercard) to offer additional benefits to the merchant and protect the PAN throughout the value chain 𝐓𝐡𝐞 𝐁𝐞𝐧𝐞𝐟𝐢𝐭𝐬 𝐨𝐟 𝐍𝐞𝐭𝐰𝐨𝐫𝐤 𝐓𝐨𝐤𝐞𝐧𝐢𝐳𝐚𝐭𝐢𝐨𝐧 𝐟𝐨𝐫 𝐌𝐞𝐫𝐜𝐡𝐚𝐧𝐭𝐬: 🔸 𝐂𝐨𝐬𝐭 𝐎𝐩𝐭𝐢𝐦𝐢𝐳𝐚𝐭𝐢𝐨𝐧 - Merchants can optimize costs with Visa’s pricing changes. Security and compliance costs can be reduced since NT reduces the scope of PCI DSS. 🔸 𝐑𝐞𝐝𝐮𝐜𝐞𝐝 𝐅𝐫𝐚𝐮𝐝 - Implementing NT offers a higher level of security for CNP transactions. The impact of any potential data breach is greatly reduced since the data is useless when stolen (i.e. 26% decline in Fraud rates). 🔸 𝐈𝐦𝐩𝐫𝐨𝐯𝐞𝐝 𝐀𝐮𝐭𝐡𝐨𝐫𝐢𝐳𝐚𝐭𝐢𝐨𝐧 𝐑𝐚𝐭𝐞𝐬 - NT involves card issuers, unlike processor tokenization. NT can be limited in scope and offer additional payment details (i.e. 2.1% increase). 🔸 𝐁𝐞𝐭𝐭𝐞𝐫 𝐂𝐗 - Card issuers can update NT in real-time replacing the need for card members to update the information periodically (i.e. 35% of cardholders stop shopping after one decline). 𝐍𝐞𝐭𝐰𝐨𝐫𝐤 𝐓𝐨𝐤𝐞𝐧𝐢𝐳𝐚𝐭𝐢𝐨𝐧 — 𝐚𝐧 𝐎𝐦𝐧𝐢𝐜𝐡𝐚𝐧𝐧𝐞𝐥 𝐒𝐭𝐫𝐚𝐭𝐞𝐠𝐲: 👉 𝐖𝐞𝐛𝐬𝐢𝐭𝐞 - Token information is captured by the merchant and shared with the Token Service Provider (i.e. VGS) and Card Issuer to validate the token and authenticate the transaction. Card Issuer then shares PAR along with the token to complete the transaction. 👉 𝐈𝐧-𝐀𝐩𝐩 - Token information is shared from the digital wallet with the token service provider and card issuer to validate and authenticate the requests. Card Issuers authorize the transaction and share customer PAR information back to the merchant PSP along with the token. 👉 𝐈𝐧-𝐒𝐭𝐨𝐫𝐞 𝐂𝐚𝐫𝐝𝐬 - The Payment Terminal captures the card data and shares it with the card issuer to authorize the transaction. Card issuers authorize transactions and share with merchants the response and PAR while the processor provides the Processor Token. Source: Deloitte — “Network Tokenization for Merchants” edited by Arthur Bedel 💳 ♻️ ( 👈 Follow this guy) Find this helpful? [ 𝗿𝗲𝗽𝗼𝘀𝘁 ] Anything to add about this subject? [𝗶𝗻𝘃𝗶𝘁𝗲𝗱 𝘁𝗼 𝗰𝗼𝗺𝗺𝗲𝗻𝘁] Nice story, Marcel. Next! [ 𝗹𝗶𝗸𝗲 ] 

Network Tokenization is an evolution in payment card data protection and transactional services for remote commerce and wallet-based transactions 👇 Network Tokenization (NT) is an industry standard published by EMVCo. First introduced with the launch of ApplePay and the payment networks, NT is gaining traction in the Card on File and wallet markets. Processor vs Network Tokens: 🔸Processor Tokenization is a proprietary service offered by PSPs (i.e. Nuvei), Acquirers (i.e. Chase) and Processors (i.e. Stripe) to minimize a merchant’s PCI scope. The generated token, which is a replacement for a Personal Account Number (#PAN), is restricted to the merchant and PSP limiting its value in the event of a data breach. 🔸Network Tokenization goes further by generating tokens in cooperation with the Card Issuer and Card Network (i.e. Visa & Mastercard) to offer additional benefits to the merchant and protect the PAN throughout the value chain. This new Tokenization process has some serious benefits for merchants: 🔸Cost Optimzation - Merchants can optimize costs with Visa’s pricing changes. Security and compliance costs can be reduced since NT reduces the scope of PCI DSS. 🔸Reduced Fraud - Implementing NT offers a higher level of security for CNP transactions. The impact of any potential data breach is greatly reduced since the data is useless when stolen (i.e. 26% decline in overall Fraud rates). 🔸Improved Authorization Rates - NT involves card issuers unlike processor tokenization. Network tokens can be limited in scope and offer additional detail about the payment (i.e. 2.1% increase). 🔸Better Customer Experience - Card issuers can update network tokens in real time replacing the need for card members to update the information periodically (i.e. 35% of cardholders stop shopping after one decline). Network Tokenization can be incorporated across all channels with a few minor tweaks 👇 👉 Website - Token information is captured by the merchant and shared with the Token Service Provider and Card Issuer to validate the token and authenticate the transaction. Card Issuer then shares PAR along with the token to complete the transaction. 👉 In-App - Token information is shared from the digital wallet with the token service provider and card issuer to validate and authenticate the requests. Card Issuers authorize the transaction and share customer PAR information back to the merchant PSP along with the token. 👉 In-Store Cards - The Payment Terminal captures the card data and shares it with the card issuer to authorize the transaction. Card issuers authorize transactions and share with merchants the response and PAR while the processor provides the Processor Token. Source: Deloitte and their report “Network Tokenization for Merchants” —— ✍️ Sign up to The Payments Brews ☕️: https://lnkd.in/g5cDhnjC ✍️ Follow Connecting the dots in payments... & Marcel van Oost #tokens #payments #globalpayments #cardnetwork #technology

Network Tokenization is an evolution in payment card data protection and transactional services for remote commerce and wallet-based transactions 👇 Network Tokenization (NT) is an industry standard published by EMVCo. First introduced with the launch of ApplePay and the payment networks, NT is gaining traction in the Card on File and wallet markets. Processor vs Network Tokens: 🔸Processor Tokenization is a proprietary service offered by PSPs (i.e. Nuvei), Acquirers (i.e. Chase) and Processors (i.e. Stripe) to minimize a merchant’s PCI scope. The generated token, which is a replacement for a Personal Account Number (#PAN), is restricted to the merchant and PSP limiting its value in the event of a data breach. 🔸Network Tokenization goes further by generating tokens in cooperation with the Card Issuer and Card Network (i.e. Visa & Mastercard) to offer additional benefits to the merchant and protect the PAN throughout the value chain. This new Tokenization process has some serious benefits for merchants: 🔸Cost Optimzation - Merchants can optimize costs with Visa’s pricing changes. Security and compliance costs can be reduced since NT reduces the scope of PCI DSS. 🔸Reduced Fraud - Implementing NT offers a higher level of security for CNP transactions. The impact of any potential data breach is greatly reduced since the data is useless when stolen (i.e. 26% decline in overall Fraud rates). 🔸Improved Authorization Rates - NT involves card issuers unlike processor tokenization. Network tokens can be limited in scope and offer additional detail about the payment (i.e. 2.1% increase). 🔸Better Customer Experience - Card issuers can update network tokens in real time replacing the need for card members to update the information periodically (i.e. 35% of cardholders stop shopping after one decline). Network Tokenization can be incorporated across all channels with a few minor tweaks 👇 👉 Website - Token information is captured by the merchant and shared with the Token Service Provider and Card Issuer to validate the token and authenticate the transaction. Card Issuer then shares PAR along with the token to complete the transaction. 👉 In-App - Token information is shared from the digital wallet with the token service provider and card issuer to validate and authenticate the requests. Card Issuers authorize the transaction and share customer PAR information back to the merchant PSP along with the token. 👉 In-Store Cards - The Payment Terminal captures the card data and shares it with the card issuer to authorize the transaction. Card issuers authorize transactions and share with merchants the response and PAR while the processor provides the Processor Token. Source: Deloitte and their report “Network Tokenization for Merchants” —— ✍️ Sign up to The Payments Brews ☕️: https://lnkd.in/g5cDhnjC ✍️ Follow Connecting the dots in payments... & Marcel van Oost #tokens #payments #globalpayments #cardnetwork #technology

Network Tokenization is an evolution in payment card data protection and transactional services for remote commerce and wallet-based transactions 👇 Network Tokenization (NT) is an industry standard published by EMVCo. First introduced with the launch of ApplePay and the payment networks, NT is gaining traction in the Card on File and wallet markets. Processor vs Network Tokens: 🔸Processor Tokenization is a proprietary service offered by PSPs (i.e. Nuvei), Acquirers (i.e. Chase) and Processors (i.e. Stripe) to minimize a merchant’s PCI scope. The generated token, which is a replacement for a Personal Account Number (#PAN), is restricted to the merchant and PSP limiting its value in the event of a data breach. 🔸Network Tokenization goes further by generating tokens in cooperation with the Card Issuer and Card Network (i.e. Visa & Mastercard) to offer additional benefits to the merchant and protect the PAN throughout the value chain. This new Tokenization process has some serious benefits for merchants: 🔸Cost Optimzation - Merchants can optimize costs with Visa’s pricing changes. Security and compliance costs can be reduced since NT reduces the scope of PCI DSS. 🔸Reduced Fraud - Implementing NT offers a higher level of security for CNP transactions. The impact of any potential data breach is greatly reduced since the data is useless when stolen (i.e. 26% decline in overall Fraud rates). 🔸Improved Authorization Rates - NT involves card issuers unlike processor tokenization. Network tokens can be limited in scope and offer additional detail about the payment (i.e. 2.1% increase). 🔸Better Customer Experience - Card issuers can update network tokens in real time replacing the need for card members to update the information periodically (i.e. 35% of cardholders stop shopping after one decline). Network Tokenization can be incorporated across all channels with a few minor tweaks 👇 👉 Website - Token information is captured by the merchant and shared with the Token Service Provider and Card Issuer to validate the token and authenticate the transaction. Card Issuer then shares PAR along with the token to complete the transaction. 👉 In-App - Token information is shared from the digital wallet with the token service provider and card issuer to validate and authenticate the requests. Card Issuers authorize the transaction and share customer PAR information back to the merchant PSP along with the token. 👉 In-Store Cards - The Payment Terminal captures the card data and shares it with the card issuer to authorize the transaction. Card issuers authorize transactions and share with merchants the response and PAR while the processor provides the Processor Token. Source: Deloitte and their report “Network Tokenization for Merchants” —— ✍️ Sign up to The Payments Brews ☕️: https://lnkd.in/g5cDhnjC ✍️ Follow Connecting the dots in payments... & Marcel van Oost #tokens #payments #globalpayments #cardnetwork #technology

𝐓𝐡𝐞 𝐢𝐦𝐩𝐚𝐜𝐭 𝐨𝐟 𝐍𝐞𝐭𝐰𝐨𝐫𝐤 𝐓𝐨𝐤𝐞𝐧𝐬 𝐢𝐧 𝐏𝐚𝐲𝐦𝐞𝐧𝐭𝐬 — Processor vs Network Tokens, the Network Tokenization process & Omni-channel benefits👇 𝐍𝐞𝐭𝐰𝐨𝐫𝐤 𝐓𝐨𝐤𝐞𝐧𝐢𝐳𝐚𝐭𝐢𝐨𝐧 (𝐍𝐓) is an industry standard published by EMVCo. First introduced with the launch of ApplePay and the payment networks, NT is gaining traction in the Card on File and wallet markets —— 𝐏𝐫𝐨𝐜𝐞𝐬𝐬𝐨𝐫 𝐯𝐬 𝐍𝐞𝐭𝐰𝐨𝐫𝐤 𝐓𝐨𝐤𝐞𝐧𝐬: 🔸 Processor Tokenization is a proprietary service offered by PSPs, Acquirers and Processors to minimize a merchant’s PCI scope. The generated token, a replacement for a Personal Account Number (#PAN), is restricted to the merchant and a single PSP environment. 🔸 Network Tokenization goes further by generating tokens in cooperation with the Card Issuer and Card Network (i.e. Visa & Mastercard and others -- GIE Cartes Bancaires) to offer additional benefits to the merchant and protect the PAN throughout the value chain —— 𝐓𝐡𝐞 𝐁𝐞𝐧𝐞𝐟𝐢𝐭𝐬 𝐨𝐟 𝐍𝐞𝐭𝐰𝐨𝐫𝐤 𝐓𝐨𝐤𝐞𝐧𝐢𝐳𝐚𝐭𝐢𝐨𝐧 𝐟𝐨𝐫 𝐌𝐞𝐫𝐜𝐡𝐚𝐧𝐭𝐬: 🔸 𝐂𝐨𝐬𝐭 𝐎𝐩𝐭𝐢𝐦𝐢𝐳𝐚𝐭𝐢𝐨𝐧 - Merchants can optimize costs with Visa’s pricing changes. Security and compliance costs can be reduced since NT reduces the scope of PCI DSS. 🔸 𝐑𝐞𝐝𝐮𝐜𝐞𝐝 𝐅𝐫𝐚𝐮𝐝 - Implementing NT offers a higher level of security for CNP transactions. The impact of any potential data breach is greatly reduced since the data is useless when stolen (i.e. 26% decline in Fraud rates). 🔸 𝐈𝐦𝐩𝐫𝐨𝐯𝐞𝐝 𝐀𝐮𝐭𝐡𝐨𝐫𝐢𝐳𝐚𝐭𝐢𝐨𝐧 𝐑𝐚𝐭𝐞𝐬 - NT involves card issuers unlike PSP tokens. NT can be limited in scope and offer additional payments detail (i.e. 2.1% increase). 🔸 𝐁𝐞𝐭𝐭𝐞𝐫 𝐂𝐗 - Card issuers can update NT in real time replacing the need for card members to update the information periodically (i.e. 35% of cardholders stop shopping after one decline). —— 𝐍𝐞𝐭𝐰𝐨𝐫𝐤 𝐓𝐨𝐤𝐞𝐧𝐢𝐳𝐚𝐭𝐢𝐨𝐧 — 𝐚𝐧 𝐎𝐦𝐧𝐢𝐜𝐡𝐚𝐧𝐧𝐞𝐥 𝐒𝐭𝐫𝐚𝐭𝐞𝐠𝐲: 👉 𝐖𝐞𝐛𝐬𝐢𝐭𝐞 - Token information is captured by the merchant and shared with the Token Service Provider (i.e. VGS) and Card Issuer to validate the token and authenticate the transaction. Card Issuer then shares PAR along with the token to complete the transaction. 👉 𝐈𝐧-𝐀𝐩𝐩 - Token information is shared from the digital wallet with the token service provider and card issuer to validate and authenticate the requests. Card Issuers authorize the transaction and share customer PAR information back to the merchant PSP along with the token. 👉 𝐈𝐧-𝐒𝐭𝐨𝐫𝐞 𝐂𝐚𝐫𝐝𝐬 - The Payment Terminal captures the card data and shares it with the card issuer to authorize the transaction. Card issuers authorize transactions and share with merchants the response and PAR while the processor provides the Processor Token. Source: Deloitte — “Network Tokenization for Merchants” —— ✍️ The Payments Brews ☕️: https://lnkd.in/g5cDhnjC  ✍️ Connecting the dots in payments... & Marcel van Oost

Network tokenization is a BIG deal to a lot of merchants. 🔒 Tokenization is the process of replacing the value of sensitive #payments details with unique identifiers (tokens). These values can't be decrypted since they're not encrypted to begin with. That's exactly what makes them so secure. --- So... What's network #tokenization? 🤷 Service providers generate and store tokens to secure card data, but the only point of card info insulation is during the hand-off from merchant to service provider & vice versa. Card networks take it a step and insulate that card data through most of the payment process, all while further bolstering layers of security. Rather than tokens being issued through the service provider, network tokens are issued through the card network (i.e. Visa, Mastercard, American Express). After a token has been issued, every subsequent transaction by that customer will use the same network token across the entire payment ecosystem. The only point where actual PAN data is exchanged is between the card network and the issuer. --- Here's what the process for provisioning network tokens looks like: 🎬 Initialization: Customer enters card details (PAN, CVV, expiration date) 🙏 Requesting Token: The merchant sends card details to service provider (token requestor), who then sends those details to card network 👨💻 Token Generation: Card network sends request to issuer, who then validates & sends back to card network. Token is generated for that customer, with that PAN, at that merchant, then sent back to service provider. 💾 Storing Token: Service provider shares the network token with the merchant (if they are the token requestor) for future transactions by that customer, or stores it themselves After the token has been provisioned, all future transactions by that customer will use that specific token. --- Benefits other than "more layers of security"? Involuntary Churn: For subscription-based merchants, network tokens are persistent. This means that merchants will always have an active card on file even if the customer replaces the card, reducing churn. Cost Reduction: Card networks are likely to reduce interchange costs per transaction for card-not-present transactions that use network tokens. Liability shifts from the merchant to the issuer, so incentivization of use is the natural next step. Fraud Reduction: Network tokens significantly reduce fraud by insulating the card details at every step of the transaction (aside from card network & issuer hand-offs) AND adding a cryptogram for that particular transaction. The merchant doesn't have to handle a customer's sensitive data, reducing information being exposed to bad actors. --- Network tokenization is big deal to merchants that want to increase auth rates, reduce churn, or simply insulate payment security points of failure. Merchants considering utilizing network tokens should consult their service providers to see if the value is there. #pcidss #fintech