Payment tokenization replaces card numbers with unique identifiers called payment tokens, enhancing the security of mobile payment services by removing sensitive information from the payment network. This process significantly reduces the risk of fraud, as the original personal account number is securely stored in a token vault and inaccessible to external systems. Tokenization requires banks or merchants to become token service providers to manage the lifecycle of these tokens, ensuring secure transactions and operations.

1. WHAT IS PAYMENT TOKENIZATION?

2. Tokenization enables banks,
acquirers and merchants to
offer more secure (mobile)
payment services.

3. It is the process of replacing card
numbers with alternate values.

4. The original personal account number
(PAN) is disconnected and replaced
with a unique identifier called a
payment token.

5. The ‘mapping’ between
the real PAN and
the payment
tokens is safely
stored in the
token vault.

6. With tokenization the
original PAN information
is removed from
environments where
data can be vulnerable.

7. Why tokenization?

8. 1. Tokenization heavily reduces the
risk of payment fraud by removing
confidential consumer credit card
data from the payment network.

9. 2. The original card
numbers stay in
control of the bank.
External systems
do not have access
to this information.

10. 3. Tokens are random numbers and
arenotbasedoncryptography,hence
they cannot be traced back to the
original value.

11. How does tokenization work?

12. A token is generated from the PAN for one
time use within a specific domain such as a
merchant’s website or channel.
Step 1:

13. Tokens are sent to the token vault and stored in
a PCI-compliant environment.

14. Tokens are loaded on the mobile device as
part of the virtual card profile.
Step 2:

15. The NFC device makes a payment at a
merchant’s contactless point-of-sale (POS)
terminal using the token as the card number.
Step 3:

16. The POS teminal sends the token to the
acquiring bank, which sends it to the
issuing bank through the payment network.
Step 4:

17. The issuer de-tokenizes the token to the
real PAN and, if matched, approves the
payment.
Step 5:

18. Response from the card issuer is returned
to the POS terminal using the token as the
card reference.
Step 6:

19. Payment tokens act like the original PAN for
returns, sales reports, marketing analysis and
recurring payments.

20. How can I use tokens?

21. In order to use
tokenization, a bank or
merchant should become a
token service provider (TSP).

22. A TSP manages the entire lifecycle of
payment credentials including:

23. 1. Tokenization:
Replaces the PAN with a payment token.

24. 2. De-Tokenization:
Converts the token back to the PAN using
the token vault.

25. 3. Token vault:
Establishes and maintains the payment token to
PAN mapping.

26. 4. Domain management:
Improves protection by defining payment
tokens for specific use.

27. 5. Identification and verification:
Ensures the original PAN is legitimately used
by the token requestor.

28. 6. Clearing and settlement:
Ad-hoc de-tokenization during clearing
and settlement process.

29. Thinking of issuing payment tokens
to secure mobile payments or
secure your online sales channel?
Bell ID can help:
www.bellid.com
info@bellid.com

30. With over 20 years of expertise, Bell ID is considered the world’s leading provider of
lifecycle management solutions for tokens (e.g. smart cards, mobile NFC phones)
deployed in single and multi-application programmes.
www.bellid.com
Martin Cox
Global Head of Sales
m.cox@bellid.com