New 'Tokenization' System Could Put An End To Identity Theft
MIAMI (CBSMiami) — With so much talk of data breaching, hacking, and identity theft many people are concerned about their personal information.
Massive breaches of consumer information, after all, have been reported what seems more often lately.
"I was pretty frustrated when I found out that my information had been stolen," said fraud victim, Chandler Nason.
Like thousands of other people Nason, a college student, was a victim. She was billed for hundreds of dollars worth of video games that she didn't actually buy.
Now, a new system could put an end to this type of fraud for good. It's called 'Tokenization.'
"We anticipate that tokenization technology will be very widespread around the world in the coming months," said Jason Oxman, Electronic Transactions Association.
In its simplest form tokenization works like a secret code substituting symbols for important information like your credit card number, or social security number.
If there is a security breach, only the symbols or 'tokens' as they are called can be stolen. Your personal information will remain a mystery to the thief.
"A token is a piece of information, an algorithm if you will, numbers and symbols that represent a card account number," said Oxman.
Experts explained that the tokens are valid for a limited time and that they can be used when making a purchase online, over the phone, or in person.
Only the bank and payment processors will know the real account information and employees will not have access to it.
"Even if somebody is able to breach a retailer, for example, and get access to those systems all they'd be able to see are these single-use tokens that don't allow them to produce counterfeit cards or do anything else to steal account numbers," said Oxman.
Credit card issuers, payment processors, and merchants are all working together to create a standardized tokenization system, experts said.
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