Data security for contactless payments in transport and retail: How tokenization works

Tokenization: keeping your data secure

A bank card number is linked to sensitive information that could be misused. Tokenization helps protect sensitive credit card data by replacing it with an anonymous number called a token – the customer’s primary account number (PAN) is substituted with a token and then passed through merchant payment systems.

There are two types of tokens in payment systems:

• High-value tokens: tokens can be used to initiate payment transactions (for example, a card token on a mobile phone)
• Low-value tokens: tokens cannot be used for payments (for example, token cards in transport solutions)

Tokenization vs. encryption

What is the difference between tokenization and encryption? Unlike a token, encrypted data is not considered a secure way of protecting PAN because it was designed to be reversible. Encrypted data can be decrypted with a decryption key and viewed and misused. According to the Payment Card Industry Data Security Standard (PCI DSS), a global security standard for accepting and processing credit cards, encrypted data is still sensitive data.

In contrast, tokenized data is irreversible and cannot be misused, because there is no mathematical operation to extract the original data from the token. You can't do that with encryption.

The benefits of tokenization for transit providers and retailers

The Switchio platform uses tokenization to ensure that our travel patterns and retail habits remain anonymous. Tokenization services protect customers from hackers – who cannot gain access to sensitive data – and ensure that the use of bank cards is compliant with both GDPR and PCI DSS standards. What are some of the other tokenization benefits?

Benefits for transit providers using Switchio Transport:

• Thanks to anonymous tokens, transit providers can use Switchio’s transport portal to analyse traffic and track passenger numbers. Passengers can then see how long and for how much they have travelled using their bank cards on the website of the travel agency.
• Ticket inspectors can download the tokenization app onto their hardware to check payments from passengers and to track passenger travel history.

Benefits for retailers using Switchio Retail:

• Thanks to tokenization, retailers can use Switchio’s intuitive retail portal to analyse advanced statistics, including, for example, how many times customers have returned to their stores. The portal also shows how many payments have been made through terminals, which region or store is earning the most, and where a certain in-store promotion has paid off the most.
• The token on each card makes it easy to recognise the card by different loyalty or cash-back programmes.

Keep your data fully secure by working with a professional partner who puts safety first.