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Benefits of using tokenisation for payment security

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Tokenisation is the process of generating a random string of values (known as a unique ID number or token) to substitute sensitive data like payment details. 

Using tokenisation, businesses can offer a smooth and secure method of taking payments that allows increased protection against payment fraud. 

So how does it work? In essence, cardholder data is stored in a secure token vault that can only be accessed by the payment provider; consumer data is tokenised immediately upon making payment so their actual card data never passes through payment systems. 

What’s the difference between tokenisation and encryption?

When talking about tokenisation, many people think of encryption. However, tokenisation offers significantly greater security than encryption, quickly becoming the industry-leading method of securing data for payment processing. Here are some of the key differences: 

Encryption:

  • Mathematically generates cipher text using an algorithm and key
  • Format preservation means lower security strength
  • Encrypted data leaves the organisation

Tokenisation:

  • Randomly generates a value for plain text
  • Format maintained without any loss of security
  • Encrypted data remains within the organisation, allowing heightened security

Benefits of using tokenisation for payment security

Reduced impact of a potential data breach

While we hope it won’t happen, data breaches are all too common in businesses and industries across the board. You don’t have to be a large corporation to become a target, either. In fact, SME’s are often recognised for their inferior systems security, making them a primary target for hackers. 

Using tokenisation, however, sensitive data like credit card numbers aren’t accessible during a  breach. This is due to the fact that data is stored as tokens, and are therefore unusable to anyone but your organisation. So while tokenisation may not be able to protect your business against a breach, the financial impact will be significantly reduced by using tokenisation for data security. 

 

Protect your reputation and build trust

As a business, your reputation is arguably your most valuable asset, one that can take years to build yet an instant to destroy. To ensure your reputation remains intact, building and maintaining trust among your customers is absolutely critical.

Particularly for online businesses, customers need to have significant trust in your ability to protect their data in order to feel comfortable making a purchase.  

Tokenisation helps businesses to build and maintain this trust by demonstrating a dedication to data security. As the most impenetrable method of protecting payment data, consumers feel confident that their card details are safe and your business maintains a reputation of putting customers first.

 

Compliance with the Payment Card Industry Data Security Standard (PCI DSS)

To ensure security of cardholder data, any business accepting, processing, or storing card details must be compliant with PCI-DSS regulations. 

There are 12 levels of PCI-DSS requirements depending on various factors of your business – primarily, how many annual transactions you process. Regardless of your requirements, striving for the highest level of compliance is always recommended and tokenisation is a great way to achieve this. 

Of course, tokenisation doesn’t guarantee compliance. However, partnering with a PCI-compliant payment service provider to offer tokenisation means you’ll also benefit from other secure services that help you to meet your compliance obligations.

 

Offer industry-leading security with tokenisation

Tokenisation is undoubtedly the most advanced way of securing cardholder data for payment processing. If the security of your customers is paramount to your business, learn more about implementing tokenisation with a PCI DSS Level 1 certified provider like Latpay.

COVID Update: Rise in cashless payments amid coronavirus

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Are you opting for cashless payments in light of COVID-19?

Since the beginning of the coronavirus outbreak, concerns have circulated about the possible hygiene implications of handling cash.

While it may not be the main mode of transmission, it is suggested that COVID-19 may stick to surfaces for hours and even days. This means that touching your mouth, nose or eyes after handling cash could potentially encourage the virus to spread.

Regardless of whether these concerns are founded or not, the notion that cash could be a carrier for the disease has seen both consumers and businesses alike alter the way they choose to operate.

 

Health concerns about cash payments

The potential for coins and banknotes to house bacteria has been acknowledged for many years yet largely unacted upon. However, this seems to be changing rapidly due to the unfolding pandemic and serious risks associated with the COVID disease.

With these concerns circling the media and propelling public concern, many businesses are now opting for cashless payments.

 

Cashless payments

The increasing push away from cash has ultimately pulled consumers towards cashless payments like Eftpos and Tap and Pay.

This presents an opportunity for businesses to enhance their electronic payment methods in order to accommodate consumer preferences.

And while COVID-19 has seen many shy away from cash, this move has actually been in motion for many years.

Whether for convenience, security, hygiene or other factors, payment via debit card in Australia has almost tripled since 2007, while cash payments have more than halved in the same period.

Of course, some people are adopting this technology far more quickly than others, with late adopters generally being older Australians and those with lower socioeconomic backgrounds.

Despite this, the shift towards a cashless society is clear; COVID-19 has exacerbated (not instigated) the preference for cashless payments. 

 

Source: Consumer Payment Behaviour in Australia | Bulletin – March Quarter 2020

 

Other benefits of cashless payments

Aside from the hygiene factors present in the current COVID-19 climate, there is a range of other great benefits to using contactless payment methods for business. Some of these include:

  1. Ability to take more payments in less time
  2. Reduced possibility of unbalanced cash floats
  3. Reduced security risks & potential for theft 
  4. Ability to action refunds and discounts more easily
  5. Understand your customers better with reporting and analytics on all transactions 

 

Coronavirus update: Business as usual at Latpay

In light of the evolving COVID-19 crisis, the team at Latpay are committed to maintaining normal business and payment processing operations over the weeks and months ahead.

Our office is closely monitoring the advice of local governments. We have tried and tested contingency plans ready to implement to ensure there is no change in the level of support we currently offer you across all our teams. 

Our plan includes employees having the necessary technology to work remotely, regardless of office location. This course of action not only helps protect the health and welfare of our staff members but also ensures we can continue to deliver the support you need through these challenging times.  

If you have any questions or concerns, please don’t hesitate to contact us via phone, email or Skype. And most importantly, stay safe.