Definition
EMV tokenization is a security technology used to protect sensitive credit card or debit card information. It replaces the card details with a unique and encrypted identifier known as a token.
EMV Tokenization Key Aspects
- EMV: It’s an umbrella term for Europay, MasterCard, and Visa, the three companies that developed the technology.
- EMV technology: A more reliable and secure method for validating transactions than other standards.
- Tokenization: This is the process of substituting sensitive data with a set of unique numbers called token, which is used in the transaction without exposing sensitive data. So, even if a hacker intercepts the token, they cannot access the original data.
The Working Mechanism of EMV and Tokenization
- An EMV is used at a point-of-sale terminal, which converts the transaction into a unique code specific to that transaction. This aims to safeguard sensitive data and prevent fraudsters from creating counterfeit cards.
- Tokenization substitutes the PAN with a token whenever card data is stored or processed. It renders the card information useless if a malicious actor accesses it.
EMV Tokenization Applications
- Mobile payments: When you add a credit or debit card to platforms like Google Pay, Apple Pay, and Samsung Pay, they replace the card number with a device-specific token.
- E-commerce: When customers store their card information for quicker checkouts, the system retains a token rather than the actual card details.
- Point-of-sale (POS) systems: Modern POS systems use EMV to protect in-store card transactions.
- Wearable devices: Wearable tech that offers payments replaces the card details with tokens.