Tokenization

How to collect periodic payments safe and easy

What is tokenization?

In short: tokens enable you to collect periodic payments safe and easy.

Tokenization is a technology that pools sensitive data, such as credit card data, and replaces them by a unique combination of letters and/or numbers. This combination provides sufficient information to retrieve the original data in a protected environment. With the use of tokens, a Payment Service Provider can execute payment orders safe and easy.

Tokenization: how does it work?

How tokens support periodic payments:

The payer executes the payment within a secured environment of the issuer (the bank or credit card company).
The issuer shares the payment data with Buckaroo.
Buckaroo shares a token with the Merchant. This token is a reference to the payment data.
Based on the Buckaroo token, the Merchant can now process new payments. Provided of course that the original method of payment is being used.

For which payment methods can tokenization service be used?

Primarily convenient for credit card payments. But also PayPal payments. And SEPA Direct Debit.

Recurring payments via iDEAL, Bancontact, Giropay, EPS and Sofort can be followed by a SEPA Direct Debit collection by using tokens. In other words: the customer can make a first payment using one of these payment methods and from that moment on, recurring payments can be collected via SEPA Direct Debit.

Example.

Someone takes out a subscription on your website. In order to collect the subscription fee, you need the IBAN number, the ascription of the account and approval via authorisation or a 1 cent payment. Or, in case of a credit card: the credit card number, ascription, VVC/CVC code and 3D secure verification. PayPal is also an option. Regardless which payment method is selected, these payment data are subsequently locked behind a code. Also called a token or a key.

Payment data storage according to the General Data Protection Regulation (GDPR)

Only authorised users can decode these ‘keys’. The token is also often personalised or linked to a specific account. Thus, the code cannot be used outside the Payment Service Provider’s payment environment and is ‘useless’ should it fall into the wrong hands. Thus, your data benefit from optimum security.

Tokenization is very useful when you do need your customer’s payment data, for example in order to execute monthly direct payments, but prefer not to store these data in your CRM (in line with the General Data Protection Regulation or for different reasons).

When is Tokenization Service recommended?

When you’ve got a monthly bill batch and do not want to look for the matching payment data every single time.
When you want to ensure that your actions comply with the General Data Protection Regulation.
When you want to minimise the risk that your customer’s sensitive/personal data are stolen.
When you prefer not to store payment data in your own environment.
When you want to make it easier for the payer to choose a different payment method or payment account (by means of an update request).

Want to change or relocate tokens?

Does your subscriber want to change his or her payment data? Then an update request can be executed. Subsequently, the token processes the new information. Want to change to a different Payment Service Provider? No problem. It is possible to relocate ‘token packages’ via a secured export.

Inspiring cases

The ideal payment method differs per situation, product or service. Because of our wide range of payment methods and unique features, we at Buckaroo are always able to offer you an appropriate solution. Let the following cases inspire you.