What is Network Tokenisation?

Network tokenisation is a security technology used in digital payments where sensitive payment card details, such as the Primary Account Number (PAN), are replaced by unique digital identifiers called tokens. These tokens securely represent the original payment data, significantly reducing fraud and enhancing the security of online transactions.

The key elements of network tokenisation include:

• Tokens instead of Card Numbers: Actual card information is replaced with non-sensitive tokens.
• Enhanced Security: Tokens have limited usability, typically restricted to specific merchants or devices, making them useless if intercepted.
• Improved User Experience (UX): Network tokenisation supports seamless digital wallet payments, recurring payments, and frictionless checkout experiences.

This approach is widely adopted by global payment networks such as Visa, Mastercard, and American Express, often integrated with advanced authentication methods like passkeys and biometric verification to further enhance transaction security and convenience.

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Network tokenisation is a sophisticated yet straightforward process designed to protect cardholder data during transactions. The primary workflow typically involves:

1. Token Generation: When a customer provides their card details for online payment or digital wallet enrollment, the merchant or wallet provider requests a token from the card network (such as Visa or Mastercard). The card network then generates a unique token linked to the customer's card data.

2. Token Storage: Instead of storing the actual card number (PAN), the merchant stores the token securely. This token is unique to that merchant or device, meaning it can't be used elsewhere.

3. Secure Transaction Processing: For subsequent payments, the merchant sends the token to the card network, which validates the token, maps it securely to the original card details, and processes the payment.

4. Dynamic Security Measures: Network tokens often come with additional security features, such as dynamic cryptograms for each transaction, further reducing fraud risk.

Network tokenisation offers multiple security and business benefits:

• Reduced Fraud and Data Breaches: Tokenisation minimizes the risk of fraud significantly by ensuring sensitive payment data is never directly exposed during transactions or stored in merchant systems.

• Simplified PCI Compliance: Since merchants do not store actual card numbers, network tokenisation reduces the burden of PCI DSS compliance, simplifying regulatory obligations.

• Improved Checkout Experience: Tokens enable smoother, faster checkout processes, supporting recurring payments, subscription billing, and frictionless checkout, improving conversion rates and user satisfaction.

• Increased Customer Trust: Enhanced security measures boost customer confidence in digital transactions, fostering loyalty and repeat business.

Network tokenisation integrates seamlessly with other modern security measures:

• Passkeys and Advanced Authentication: Using passkeys in combination with tokenisation further strengthens transaction security by ensuring robust, phishing-resistant user verification.

• Biometric Authentication: When paired with biometrics, tokenisation provides fast, secure, and frictionless transactions.

• EMVCo SRC and 3D Secure Protocols: Network tokenisation often works alongside secure checkout standards such as Secure Remote Commerce (SRC) and 3D Secure, enhancing both security and convenience.

Widely used scenarios include:

• Digital Wallets (Apple Pay, Google Pay): Digital wallets use network tokens instead of actual card details, ensuring secure and easy payments.

• E-commerce Merchants: Platforms like Amazon or subscription services like Netflix securely store tokens to process payments seamlessly without exposing cardholder data.

• In-App Payments: Mobile apps use tokenisation to securely store user payment information, ensuring faster, frictionless in-app purchases.

By leveraging network tokenisation alongside advanced authentication methods like passkeys, merchants and payment networks ensure secure, frictionless, and future-ready payment systems.

Network tokenisation secures digital payments by replacing sensitive card information with secure digital tokens, reducing the risk of fraud and data breaches.

It prevents the exposure of sensitive payment card data during transactions and storage. Tokens have limited usability, making stolen tokens effectively worthless.

Encryption protects sensitive data by scrambling it into a coded format. Tokenisation replaces sensitive data entirely with non-sensitive tokens, significantly reducing data security risks and simplifying compliance.

Digital wallets like Apple Pay and Google Pay use tokens instead of storing actual card numbers. These tokens are securely linked to the user's card data, enabling secure and easy payments without exposing sensitive information.

Integrating network tokenisation with passkeys provides an exceptionally secure authentication layer, eliminating password vulnerabilities and enhancing user convenience and transaction security.