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What is Credit Card Tokenization?

What is the biggest problem with Credit Card Data?

A tongue in cheek reply would be: "The Credit Card Data dummy!" While it is a tongue in check reply, there is some truth to it.

Having been involved with many implementations, I have seen this over and over. It is always an issue securing and protecting this data and only displaying it to those that need to know. Here are some classic issues I have seen.

Most SAP infrastructures include a Quality Assurance client for testing changes before moving these to the Production environment. And it is very often a copy of Production at some point in time. And what comes over with that copy? All the customers Payment Card data. So you need to do 1 of 2 things:

  1. Purge the Credit Card Data (have to write a custom program)
  2. Encrypt that data - very often not activated in the QA environment. And quite a process to turn on.
So everyone forgets about it until someone notices this. Then everyone is scrambling and QA is shut down to most users until it is resolved.

The Result of Encryption

When a credit card is encrypted in the database, it is displayed as ************4141 for example.

The problem is that it needs to be displayed everywhere like that. I have seen instances where someone will run a report and the unencrypted credit card will show up. Or someone enters a transaction from a different direction, or accesses a rarely used screen, and suddenly the unblemished, unencrypted credit card data show up.

And in reality, the Payment Card is still saved in our database. And we are responsible for securing and protecting that data.

What is a Token

What if we could move the Credit Card data from our database and give it to another server (called a Token Server)? The Token server then gives us back a Token that is representative of the Credit Card data. So the actual Credit Card data in our databases, is now replaced by a Token data.

For example: It gives us back ************4141 to store in out database. The only link from the token to the Credit Card data is now held on the Token Server.

Advantages of Tokenization

  1. Now we do not have the credit card data in our database. If someone hacked into our database or a user accessed the customer Payment Card data, they could not do anything with the ************4141.
  2. Obviously the Token Server needs to be secured and PCI compliant. But this means that we only have one system to secure, instead of potentially many systems.
  3. And if we contract with a 3rd party to supply this Token Server, we have now moved the responsibility off site to another company whose core business is to secure such data and remain PCI compliant.
  4. This reducing our costs.
  5. If the Credit Card data is ever needed, a query goes out to the Token Server which returns the Credit Card Data. This makes PCI compliance much easier as we do not store Credit Card data on site anymore.

Who offers these Tokenization Services for SAP

Probably the best known of the Service Providers is Paymetric, with their XiSecure Service (they use a 25 Character Token).

They have 2 versions of it:
  1. XiSecure - Onsite local Installation
  2. XiSecure - SAAS Hosted Offsite Service.

Whilst I have not implemented a Token system yet, it makes sense and would be a useful compliment to a Credit Card Payment System.

Hope this brief article helps you understand what tokenization is and how it helps your business.
Feel free to add Comments and Questions.

The SAPGuy​

SAPGuy
 

  • Sreehari says:

    Hello,

    I have read the articles written by you, these are excellent !!!!!!!!!!
    Could you please share what are the developments / cofigurations / settings required in SAP from integration point of view with XiPay.

    This would be a great help to all, who are working in this area.

    Thanks a lot,
    Sreehari.

  • SAPGuy says:

    Hey readers

    I ran across an article yesterday regarding the fallout that Target has had due to their data breach. Their CEO has had to resign after 35 years of service. They had 40 million credit cards stolen.

    In 2012, there were over 267 million credit card records compromised with an estimated cost of over $5.4 million dollars. And that is probably on the low side.

    Minnesota is considering legislation to force companies who have had a breach, to provide free credit monitoring and a $100 gift card on top of that. And several other states are considering similar measures. Think about it, if Target was forced to give all the consumers a $100 gift card – that is 4 Billion dollars !!!! And that does not include the cost of free credit monitoring.

    With those kind of numbers, it may make sense for them to buy a credit monitoring company – probably cheaper than paying for the services. Not the best PR message to consumers though.

    At a very minimum, companies need to insure against Privacy and Data breach.

    Tokenization just makes sense.

  • julian says:

    I know Delego Software also offers SAP tokenization http://www.delegosoftware.com might be worth comparing with paymetric for the best solution.

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