Tokenization will supplement EMV fraud prevention

by: Brandon Bogler

I recently had the pleasure of teaming up with my colleague Brandon Kuehl, TMG product development manager, on a white paper exploring the implications of tokenization for community financial institutions (FIs) that issue credit and debit cards. The paper, “U.S. Participates in the Global Fight Against Card Fraud,” examines how credit unions and community banks are implementing tokenization for the protection of digital payment data.

Below is an excerpt from the paper, breaking down how tokenization addresses card-not-present (CNP) fraud, which is expected to increase as EMV chip cards make card-present fraud more difficult in the U.S.:

To mitigate the impact of expected digital fraud increases, tokenization has stepped up to the plate. Whereas chip cards were created to address card counterfeiting, tokenization was built to remove card data entirely from digital devices and infrastructure. Not only does this reduce the security vulnerabilities, it also allows issuers additional control of payment devices in the digital channel. Together, EMV and tokenization tag-team to reduce or eliminate fraud in the card-present and CNP channels with minimal to no impact to the cardholder…

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