Overview

Network tokens represent a significant advancement in payment processing. They act as unique digital identifiers that replace sensitive card details like the Primary Account Number (PAN) with alphanumeric strings. Businesses want secure payments that maximize conversion and improve customer experience. Network tokens help meet both of those goals.

VGS simplifies payment management by automatically converting stored card numbers (PANs) into secure network tokens. If a customer's card is lost, stolen, or replaced, VGS receives updates from the card networks and automatically updates the tokens, ensuring uninterrupted payments without customer intervention.

Concept of Tokenization

Tokenization emerged as part of the evolution of payment security and the need to protect sensitive cardholder data in an increasingly digital world. In the early stages, tokenization was used as a data protection mechanism. Companies began using tokens to replace sensitive card information, like Primary Account Numbers (PANs), to enhance security.

Fueled by the rapid growth of e-commerce, mobile payments, and digital wallet transactions, major card networks introduced network tokens. These tokens replace sensitive PANs with unique identifiers, significantly reducing fraud and marking a major advancement in payment security.

The difference between Network Tokens and VGS Alias

At VGS, a token is called a Record, and the reference identifier is called an Alias, and it stores a Value. A Record can have one or many Aliases, allowing you to represent a single element of sensitive data in many ways depending on the permissions use-case, or the sensitivity of the data. The stored value can be network tokens.

Benefits of using Network Tokens with VGS

• Increased Authorization Rates: Merchants can boost authorization rates by 2-3%*. When a card is lost, stolen, or expires, issuers update the token with the new card details. This allows payments to process seamlessly even if the customer hasn't updated their card information with the merchant. This is particularly helpful for recurring payments or subscriptions. VGS Network tokens and Card Account Updater also work together to maximize authorization rates and optimize checkout conversion.

• Reduced Processing Fees: Card networks incentivize the use of network tokens by offering interchange discounts. For example, Visa offers a 10 basis points (bps) discount for certain merchants on eligible transactions using network tokens. These benefits can vary depending on the merchant, region, country, and card type.

• Enhanced Fraud Prevention and Security: By removing PAN data from the payment flow, network tokenization significantly reduces the risk of payment card fraud and data breaches. This decrease in exposure leads to fewer chargebacks and higher authorization rates, as issuers have greater confidence in tokenized transactions. This increased confidence stems from the reduced risk of compromised card details.

• Streamlined Transactions: Network token often requires a one-time cryptogram that needs to be fetched from the networks. As a result, network tokens can be prone to high additional latency compared to using PANs. VGS has optimized its infrastructure to minimize this delay, ensuring high payment success rates.

• Reduced PCI DSS Scope: By minimizing the handling of sensitive card data, merchants can reduce their compliance burden under the Payment Card Industry Data Security Standard (PCI DSS).

How does VGS provide Network Tokens?

VGS maintains direct integrations with card networks to facilitate the use of Network tokens. Please contact support for further inquiries.

What are the steps to using Network Token?

1. Merchant Onboarding:

• Merchants register for Network Tokens directly with VGS.

• VGS transmits information to the networks.

• Networks issue the client a unique "Token Requester ID" (TRID).

2. Enroll Cards:

• With the TRID, merchants can enroll existing cards for Network Token through VGS.

• Network token availability for immediate transactions.

3. Processing Payments:

• Once cards are enrolled, clients can use Network Tokens for future transactions.

Network Token Prerequisites

To use Network tokens, you must have a VGS Account. Please contact support to activate Network tokens.