The EMV system is making its way into credit card payment processing systems around the country as America, only last year, finally embraced the system. And while the EMV system does mean America is joining a larger, well established global standard for the payment processing of credit cards, that also means that this is an older system in other parts of the world that has documented security flaws, and possible points of exploitation.
In other words, just because the EMV system is new to America, that doesn’t make it safer from possible criminal/fraudulent activity, because the system is already well understood in other parts of the world. This is why, along with using an EMV system, incorporating tokenization may be one of the best ways to keep your credit card payment processing much more secure.
Tokenization is a system in which sensitive data, such as credit card or ACH numbers, are protected by being “replaced” and stored away in a secure, encrypted system, and replaced with “token” data which, even if it is lifted through criminal means, is useless to the person that has stolen the data.
For example, a customer decides to buy something on a website. The credit card number is entered on the website, but the field of entry that data is typed into automatically encrypts the number, and sends that information to a “gateway” where a token is generated. Once the payment goes through, the only data that is stored on the retail website is the token itself, which will may look like this: ****1234, which, to anyone that steals data, only looks like a series of asterisks, followed by the last four digits of the credit card number.
In other words, tokenization moves the important data away from the point of sale, and provides “useless” data instead which the POS will accept and use as a substitute for the actual data. In this way, even stolen data serves no purpose to criminals unless they somehow have access to the token generator and decryption service.
Tokenization works with POS, CNP and NFC transmissions, and has beneficial, wide ranging security advantages beyond just protecting financial information. This is important, because the USA has one of the oldest, most established credit card systems in the world, which means, unfortunately, that being able to standardize every city and town to a modern system is unlikely. But as credit card payments come into wider use, we need to adopt more secure methods to keep up with both new and old tactics for exploiting this method of payment.
The EMV system brings America into step with the rest of the world, making the country much more modern and competitive, but tokenization is a welcome, added layer of security that can make these transactions safer than ever. If you are thinking of using the EMV system for your credit card processing, think about looking into modern systems of security and authentication as well.