In times of economic uncertainty, merchants face unprecedented pressure to deliver results and grow their bottom line while ensuring a seamless and secure experience for their customers. In order to deliver against these challenges, ecommerce merchants are more closely examining ways to optimize their payments stack to find areas where they can reduce transaction expenses without negatively affecting their checkout. One such solution is Network Tokenization, which helps merchants drive authorization rate performance, reduce transaction expense, minimize fraud, and maximize revenue.
Every credit or debit card is embossed with a string of numbers, typically around 16 digits—some are as short as 14 and as long as 19 depending on the card network and region—that identifies a cardholder and the corresponding issuing bank. This 16-digit number, also referred to as a Primary Account Number (PAN), is unique to each card and is the number a consumer uses when placing an order online with any merchant. Because the PAN is static, if compromised, a bad actor can use the same card number to defraud multiple merchants.
To help reduce online fraud and enhance the security of a merchant's checkout, Braintree tokenizes cards stored in the Braintree vault. Tokenization is the process of algorithmically creating a unique identifier that acts just like a traditional card or PAN and can be used to process transactions. Each card has its own token, and unlike a PAN, the token cannot be used fraudulently by a bad actor.
Network Tokenization goes beyond tokenization and replaces a traditional primary account number (PAN) with a merchant-specific cryptographic token. This token can only be used for a particular merchant; a network token created for one merchant can't be used to transact at a second, different merchant. In addition, network tokens can be dynamically updated or refreshed in real-time if a card is lost, stolen, or expires.
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