Tokenization Technology
To learn more, visit aba.com/PaymentsandCyber.
Tokenization is one innovative technology that banks use to protect customers from fraud.
Other Technologies
45% card not present
38% counterfeit
13% lost or stolen
4% other
Personal account number (usable if stolen) vs. token (useless to thieves)
Tokens can be configured so that they are only good for transactions that fit specific criteria
Even if the retailer systems are compromised, thieves can only get tokenized data. Since tokenized data is useless to a fraudster, the customer is protected despite the data breach.
After a data breach, if a token is used elsewhere, the Network can detect the token as stolen and will reject the fraudulent transaction.
Although customers may not see it, banks are adopting many invisible technologies to protect against fraud. Tokenization is one technology that banks are using to protect customers when they pay online or with their smart phone.