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An EMV (once known as Europay, Mastercard, and Visa) Payment Token is a modern-day alternative within the digital payment system. An EMV Payment Token is considered a surrogate value that replaces a consumer’s primary account number (PAN) in the payment ecosystem. To better understand the EMV payment tokenization system, it is important to first have knowledge of the current EMV chip card system issued around 2010.
MV cards (also called chip cards) are payment cards designed with a computer chip that operates dynamically like a mini processor/transmitter. These cards are generally considered more secure than most legacy credit card systems. In lieu of swiping a magnetic stripe at the point of sale (POS), EMV cards are inserted into or waved over a chip reader. EMV chip cards store more information and they are more difficult to copy – which means they provide a higher level of anti-fraud security.
EMV Payment Tokenization
EMV payment tokenization takes EMV card technology a level further. Tokenization is the process by which a single payment card is merged into various independent systems using tokens. In fact, one credit card can have multiple tokens for multiple devices that include smartphones, wearables, and associated wallets. The versatility of the EMV card-to-token payment offers the option to pay in-store, on-app, or online. EMV payment tokenization is also vital for payment security in today’s digital marketplace. Tokenization reinforces the security of digital payments and reduces risks associated with the unauthorized use of primary account numbers (PANs).
How EMV Payment Tokenization Works
The EMV payment tokenization system converts a primary account number (PAN) into tokens that are used within various devices. Below are the steps of tokenization involved at the payment level:
1. When a consumer uses their device on a reader to pay a merchant, a token provides payment credentials to a network.
2. The EMV payment tokenization system verifies validity of a transaction to ensure the correct token for the correct device, and that the proper payment is about to process.
3. A token vault is used to convert a token back into a PAN, recalculating the associated cryptogram before finally requesting the financial authorization from an issuer.
EMV payment tokenization offers simplicity and an added level of security for all parties involved in the payment process.
EMV Payment Framework
EMV payment acceptance is an attractive option for merchants as more and more multi-channel wallets and payment types come on the market. In order to guarantee a certain level of payments security for merchants and consumers alike, a global technical body called EMVCo defines the worldwide payment framework. This is the framework required to create, disburse and manage payment tokens in a secure, reliable manner.
It is important that EMV payment suppliers be EMVCo Approved—meaning that their product was evaluated by EMVCo and found to offer “sufficient assurance of certain minimum levels of security, including security mechanisms and protections designed to withstand known attacks.” As an example, Verimatrix Digital Payment SDK is EMVCo approved. By doing business with companies that are EMVCo approved, the added security and processing benefits of an EMV payment framework are beneficial to merchants, issuers, payment processors, acquirers and stakeholders alike.
More About EMVCo
EMVCo payment tokenization is currently operating on Technical Framework 2.0. This version includes payment token capability for e-commerce that goes beyond a card system, controlling payment tokens within a single-payment channel. It also includes the existing token services roles of token service provider and token requester along with new roles including token program merchant and token user. This version is available to all industry participants. Technical documents and guidelines are available to guide merchants and help them meet regulations.