Tokenisation – How Banks are Learning from Casinos to Increase Cybersecurity

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Physical credit card fraud has been falling for many years thanks to chips and PINs; however, it has moved online.

Targeting individual consumers or breaching companies’ databases, skimmers, scammers, and hackers are lurking in the virtual world.

As online merchants seek to boost sales through the latest data-driven technologies, more cyber protection is needed than ever before by banks and processors to dramatically reduce the value of any payment transaction data stolen by hackers from the retail environment.

According to The Cyberthreat Handbook produced by Thales and Verint, 20% of cyber attackers are criminals motivated by financial gain.

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Simultaneously, a study from Juniper Research shows that retailers will lose around $130 billion in digital Card-not-Present fraud between 2018 and 2023.

A solution to stop eCrime from Thales

Thales is using its payment and cybersecurity expertise to turn this around with “tokenisation” of the worldwide EMV credit card standard.

In tokenisation, your credit card information is only held by your bank and not by online retailers.

The process converts sensitive cardholder information into a unique token or digital identifier, which is then reconverted by the bank to process payment.

The result?

The credit card number and information are never sent. So, there is little chance of compromise, even during a data breach.

Just like tokens won in a casino can only be cashed there, so vendors can only cash their tokens at your bank.

Already adopted by leading digital wallets, with over 500 million users, tokens are increasingly used for eCommerce payments.

“Credit card tokenisation is the key technology enabling banks to deploy their digital payment services eco-system. One of Thales’s authentication and risk management solutions, tokenisation protects digital banking and eCommerce customers from cyberattacks on all their devices so that they can have a user-friendly, secure online experience,” says Xavier Larduinat, Marketing Manager for Digital Banking and Payments, at Thales.

A token as a key to new credit card services

By replacing your card with a token, your bank will manage the card’s life cycle and can offer a wide range of new online services.

For example, you will be able to control all eMerchant accounts and digital wallets from the bank’s website, adding them without filling out forms and deleting them at will.

When a credit card expires, the related EMV tokens link automatically to the new card. Moreover, payments can be split between cards and will no longer be declined based on erroneous risk assessments.

“Consumers like tokenisation because it increases eCommerce security and convenience; merchants like it because it reduces fraud, and banks like it because it boosts both traffic to their mobile sites and transaction fees,” adds Xavier Larduinat.

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