What is Credit Card Tokenization?

man explaining what is credit card tokenization

Credit card tokenization is the process used to create a token to represent a customer’s credit card, this tokenis an alphanumeric string of characters that represent that customer’s credit card.

Your credit card processor is responsible for storing your customers’ credit card information securely and encrypting the information so it cannot be used by anyone who is not authorized to do so. Credit card tokenization is used so that instead of storing full credit card numbers on your business’s website or system, you are instead storing a token.

Once a credit card is tokenized in your payment processors system, it can only be used within that system and your business’s merchant account. So, the next time you need to bill that particular credit card, you would simply send the token to the payment processor, who will decrypt the real credit card number and process the payment.

Credit card tokenization helps your business by retaining all the benefits of storing customer’s credit card information for quick and easy payments, without the headaches and liability of actually storing full credit card numbers.

So, what happens if the token is stolen? Unlike when a credit card is stolen, if a hacker were to steal your tokens, they wouldn’t be able to extract credit card numbers from them. Your tokens are useless to hackers because they cannot be used anywhere outside of your merchant account and within your payment processor’s system.

If you are a Helcim merchant, your customer’s credit card information is securely stored by our card vault on our secure servers, and you are able to safely store the token on your own database because it is simply an identifier for the stored credit card.

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