What are network tokens?

Introduction

To protect customer cardholder data and promote higher authorization rates card networks introduced network tokens, a technology supported by the EMVCo standard.

What are Network Tokens?

Network tokens are digital and dynamic representations of a payment card's details like card number Network tokens are digital representations of a payment card's details like card number (PAN) or expiry date. Created and managed by card networks like Visa and Mastercard, these tokens replace sensitive card information during transactions, enhancing security and reducing the PCI compliance burden on businesses.

How are they maintained?

Network Tokens are dynamic and auto-updated; for example, if a card is lost or stolen, the card issuer notifies the card network, which links updated card details to the existing Network Token, allowing merchants to not worry about payment declines.

First implementations

In 2014, Apple Pay introduced one of the first uses of network tokenization in payment processing, using unique, transaction-specific tokens to secure payment data, reducing credit card fraud risk.

Following Apple Pay, Visa, MasterCard, and American Express expanded tokenization, establishing standards for token management. Visa's Token Service (VTS) and Mastercard's Digital Enablement Service (MDES) provided infrastructure for secure payment token issuance and management, enhancing digital payment security.

Benefits of using network tokens

• Less fraud: Unlike traditional card numbers, network tokens are not static and can be dynamically updated, making them less attractive targets for fraudsters.
• Higher authorization rates: For the same reason as above - if customer card is expired or lost network token is proactively updated. As a result both merchants and users enjoy simplified payments experience for recurring transactions.
• Lower costs: The card schemes generally offer a lower fee for tokenized transactions. The number will depend on your payment provider, but it can be up to 0.1% per transaction.

Challenges with Network Tokens

While network tokens offer significant advantages, not all payment processors and gateways support them. To utilize network tokens, businesses must either partner directly with card networks or work with providers like Cybersource that offer tokenization services.

However in order to create a token you need to pass sensitive card data to these entities, which means your business must first achieve PCI compliance, a costly and time-consuming process.

How Modernbanc helps with Network Tokens.

Modernbanc, a Tier 1 PCI-certified Vault provider, provides a partner-agnostic solution allows you to avoid vendor lock-in and integrate with any network token provider.

Integrate with card networks directly.

Leverage your own Visa/Mastercard partnerships and use Modernbanc to collect and manage card details from your customers, pass them to your card networks and exchange them for a network token.

Integrate with a third party Network Token provider.

Use Modernbanc to compliantly collect cardholder data and create and manage network tokens with providers like Cybersource that offer tokenization services.

FAQs

What are TRIDs (Token Requestor Identifier) and do I need them?

The Token Requestor ID (TRID) is a unique identifier assigned to entities that request tokens on behalf of cardholders in the context of network tokenization. You need to have a TRID in order for networks to identify you for security purposes.

You can typically obtain either via third party providers like Cybersource (faster approach) or directly with card networks (e.g Visa/Mastercard) after going through their onboarding and partnership process.

If you're planning to partner directly with card networks we're happy to assist and facilitate that discussion.

Can I store Network Tokens?

Yes - in their tokenized form they're not considered PCI-sensitive data. Therefore you can store and operate them on your systems.

How does Modernbanc help with Network Tokens?

You need to collect cardholder data in order to exchange it for a network token and in order to do so you have to be PCI-compliant.

Modernbanc provides out-of-the-box PCI-compliant infrastructure that allows you to compliantly collect and process cardholder data along with sending it to your Network Token Provider.

How do I get started with Network Tokens on Modernbanc?

In the simplest cases, building a network token implementation for your platform can take minutes. Regardless of the path you choose, we'll help you design your architecture and understand which provider to use.

To get started, book a call with us here or contact us via chat