On the back of numerous retail security breaches at the point-of-sale, tokenization has quickly become a hot point of discussion. Whether its the inclusion of the encryption technology into new payments mediums - such as Apple Pay - or retailers looking to replace POS systems to ones that feature security tools, tokenization has gained a lot of time in the spotlight in recent months.
Several major retailers have voiced their support for tokenization as a means of enhancing payments security in recent months. For example, Repair Clinic, a seller of replacement parts for household appliance and similar tools, was recently interviewed by Internet Retailer. The firm moved from encrypting and storing payment card data on its own to leveraging tokenization and has not looked back since.
RepairClinic sings the praise of tokenization
RepairClinic noted that tokenization essentially converted data into useless information, so if it gets stolen by fraudsters, they do not actually gain hold of any sensitive information. This is huge for retailers, as it removes the target on their back that conventional payment processing technologies put there. Considering they do not get any useful information, there is no incentive for criminals to target businesses using tokenization to encrypt payment data.
“That security technology enables RepairClinic to store and use those tokens within its systems without security concerns because it doesn’t retain any useful card data,” added Internet Retailer. “The retailer only stores the last four digits of a customer’s card to enable it to identify transactions to process returns. The full card data are kept by its payment processing vendor.”
Chris Hall, RepairClinic’s president and co-founder, was quick to sing the praises of tokenization. While the merchant used encryption solutions in the past, these tools were not as secure as the company’s new POS solution that leverages tokenization.
“[In the past,] if you figure out how to breach our encryption system, you could decrypt the data,” he told the news source.
Retailers are looking to provide an extra layer of protect to customers. They realize that if even major brands such as Target and The Home Depot can be breached, they can as well. With encryption technology such as tokenization, however, they can minimize the damage done because they are not holding on to meaningful payment information.