There are some technologies that are considered to be game changers. The computer, telecommunications, and the internet technology are certainly game changers as far as the last five to six decades are concerned. There are many who believe that blockchain technology could be another game-changing technology as far as the 21st century is concerned. It is indeed a path-breaking but controversial technology. It has the potential to change the traditional methods of receipts and payments. Additionally, it also has the potential to replace the normal methods of financial activities. This is perhaps the precursor to token payment systems. Tokenization is a new concept and therefore it is worth having a closer look as to what exactly it offers.
What Does It Offer?
When a digital payment is made physically money does not move between the buyer and the seller. Instead, a digital authorization to debit the bank account or credit card account is what moves from the buyer to the seller. Today it happens by the buyer entering credit or debit card PANs or Primary Account Numbers. This is followed by the expiry date of the credit or debit card and finally, the secret number on the reverse of the card has to be entered. Of course, the amount of the transaction has to be also mentioned. The above information moves from the buyer to the seller. The secret code and a major portion of the PAN number are hidden from public view and it is not even visible to the seller. However, there have been instances where cybercriminals and hackers have been able to successfully decipher the PAN numbers and secret code and then use the same to withdraw money from the debit and credit cards of the customers.
How Could Tokenization Help
It is here that the role of tokenization could come in handy. This is a technology by which it is possible to send critical and vital information such as PAN, validity date and the secret code in the form of encrypted token. The token moves from the buyer to seller in the form of numbers and symbols which does not make any sense to those who view when it travels from the buyer to the seller. Hence, the security and safety features get enhanced significantly and the risk of phishing and hacking of your personal and financial details get reduced significantly.
How Does The Future Look?
These are still early days as far as tokenization is concerned. There is still a long way to go before it reaches the critical mass. There are issues pertaining to technology which need to be addressed especially when the volumes ramp up. Further, there have been a few instances where the cyber thieves have been able to even get into the encrypted payment methods and steal valuable data.
But the future does look quite bright given the fact that there are some undeniable advantages associated with tokenization. It goes a long way in making online transactions safe and secure. Further, it not only B2C requirements but could also make a big difference to B2B needs to. The day may not be far off when almost all the transactions online would be moving through tokenization.