Tokenization vs. Digitization

Tokenization and digitization are two central elements in mobile payments which are easily mixed when talking about them. Many are confused about their meaning and therefore use them interchangeably. Let us have a look at what the difference is:

Tokenization

Tokenization is simply the act of generating a device token (also called payment token). This will function as a representation of the funding primary account number (PAN) and expiry date given on your payment card. A mapping between the PAN data and the payment token is then created in a secure token vault for use in subsequent transaction processing.

It is possible to have several device tokens mapped to the same underlying funding PAN. This will be the case if you have two or more devices in which you want the card to be stored and be able to pay with:

Figure: Multiple device tokens mapped to the same underlying PAN

If the device is lost or stolen, the mapping can simply be deleted from the token vault in order to make the device token invalid. The device will then no longer be able to perform transactions.

Digitization

The process of card digitization optionally includes tokenization (however required by Visa and Mastercard), but in addition embraces all other subprocesses needed to make a complete digital card ready and provisioned onto a device. These subprocesses comprise of important tasks such as identification and verification of the cardholder, card- and device eligibility checks, tokenization approval, provisioning of the digital card and initial key replenishment.

The figure below shows it very clear that tokenization is just one element of digitization and handles only the part with token creation and mapping. When speaking of digitization, we are referring to the complete process starting with the digitization request from the consumer’s device, to the card is fully digitized (gone through every one of the subprocesses listed) and provisioned onto the device with key credentials. When the digitization process is complete, the device is ready to be used for payment.

   Figure: A simple overview of the different subprocesses included in digitization

MeaWallet has made all of this simple with its Mea Token Platform that handles both digitization and tokenization, by connecting Issuers to AmEx, Mastercard and Visa’s respective token platforms. Get in touch with us if you are interested in learning more about how this works and how we can help you get started with mobile payments. Just leave a reply in the contact form at the bottom of our web page, and one of us will contact you in no time. 

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