Network Tokenization 101

 

Today, network tokenization is crucial for businesses that accept card payments, whether online or in person. As a vital part of eCommerce fraud prevention, merchants must understand how these tokens work and simplify recurring payment processes while enhancing transaction security.

Tokenization has safeguarded digital payments since the mid-1990s, starting with the rise of online shopping. Early solutions replaced account numbers and other sensitive information with payment tokens, adding an extra security layer to secure payment pages. By the 2000s, merchants needed to simplify payments by connecting directly with their payment service providers, giving them more control over their customers’ payment experiences.Then, in 2014, modern network tokenization emerged, first used by digital wallet solutions to reduce the risk of data breaches. Card networks issued tokens to protect sensitive data for the first time, introducing global interoperability and dynamic security to help merchants stay ahead of emerging threats.

What is network tokenization?

Network tokens replace sensitive payment and card information throughout the transaction process. These digital payment tokens, unique and generated by card networks like Visa and Mastercard, serve as a secure proxy for sensitive data. They replace primary account numbers (PANs) and other sensitive details rather than being managed by merchants or their payment service providers (PSP).

Though often used interchangeably, network tokens and payment tokens serve different purposes. Network tokens are issued by card networks and are widely recognized across the entire payment ecosystem. In contrast, payment tokens encompass any tokens utilized in digital payments. There are several types of tokenization techniques, like payment gateway tokenization, PAN tokenization and PCI tokenization. That means network tokens are a type of payment token, but not every payment token is a network token.

Several key features define network tokens:

• They are created by card networks, not by merchants or payment processors.
• Each token is unique and linked to a specific customer and account number, making it useless if intercepted.
• Tokens are generated when customers start a transaction.

Network tokens can be used across channels and devices, providing more versatility than other payment tokenization methods. Unlike merchant or payment gateway tokens, network tokens are widely recognized across the payments ecosystem because they come directly from the card networks. A cryptogram – a security code – is typically included in each token transaction to authenticate the transaction. This means that if someone intercepts the token, it’s useless without the cryptogram, adding an additional layer of security to the payment process.

How does tokenization work?

All network tokenization processing occurs behind the scenes to facilitate frictionless payments for customers and enhanced transaction security for merchants. Tokenization begins when a customer initiates a transaction. Once they provide their payment details, information is sent to their card issuer, which generates a network token that is then shared with both the customer’s bank and the merchant’s PSP. Since the merchant can store this information to streamline and protect future transactions, network tokenization is sometimes called card-on-file tokenization.

Network Tokenization, Step by Step

Step 1; The customer enters their card details into the merchant’s system

Step 2; The merchant sends the request to the card network and requests a network token

Step 3; The card network works with the customer’s bank to approve or deny the request

Step 4; If approved, the card network generates a token and shares it with the merchant’s gateway

Step 5; The merchant stores the network token for future use

For example, if Jess saves her Discover card information in her account on an e-commerce site, the site can request a network token instead of the PAN. The next time Jess makes a purchase, the merchant submits the token and Discover maps it to Jess’ actual account information to complete the transaction.

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Attention Wineries

 

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• POS Specific to wineries
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Existing winery softwares have always been clunky and expensive—we’ve changed that. Here are a few ways we’re accomplishing that:

• An intuitive and elegant user-experience that maximizes efficiency and productivity.
• Keep your hard-earned money. We simplify pricing and eliminate junk fees.
• No contracts. We want you to work with us because you like us, not because you’re forced to.

Pricing designed to fuel growth and success;

Our competitors like to charge you for everything – software, payment processing, additional volume fees, and all kinds of other junk fees. Bankcard Processors keeps things simple, fair, and most importantly affordable.

Contact us today with any questions!

What To Do With Old Credit Cards

 

What are credit cards made of?

A banking card is usually composed of the following raw materials:

• Several layers of laminated plastic, usually using PVC, alternatively PET  or a bio-sourced material.  
• Inks for printing credit cards with a magnetic stripe. 
• Metal oxide particles with solvents are often the basis for inks.
• There are different types of cards, all using different materials (plastic, plastic substitute, metal, and chips…). 

As a consequence, the way we should dispose of them should be adapted to each component. We can easily imagine the metal within the card shall go to a different recycling stream than the plastics.

The toxic journey of a credit card

What happens to the banking cards after we throw them into the trash bin?

Every year we use 30 million kg PVC for banking card issuance, the equivalence of the weight of about 150 Boeing 747s. 

In most cases, banking cards will either go to the landfill or be thrown into nature. This is the worst-case scenario as it will gradually turn into microplastic and gets back to us.

It will get back to us because we will ingest the particles through the food chain. It's already happening now. In fact, according to a study by the World Wildlife Fund, you are probably swallowing micro plastic equal to the weight of a credit card each week! That's where recycling fits in.

Can plastic credit payment cards be recycled? The answer is YES, but it's not that obvious.

Every banking card is a well-designed compound made up of metals (copper, nickel, gold, aluminum, iron), resin, glass, silicon, and plastics (PVC, PET). This complexity makes recycling payment cards challenging.

How does the recycling process work?

This is what happens in the recycling facility:

Recover plastic and metal: 

• The cards contain plastic (like PVC, PLA, PET): during the separation of materials, plastic and metal are isolated... Recycling metals and plastic and selling them to the second-hand market allows for the recovery of essential resources, which can then be reused in the industry.
• As an alternative, all can be incinerated to recover the energy, meaning the recovered heat can be injected to an industrial installation or to an institution.
• In incineration process, Bio-sourced material such as PLA (Poly Lactic Acid) is a better option than PVC, as it will not generate toxic gas during incineration.

Recycle metals: 

The metal will be sent to manufacturing for a second life: depending on the metal recycling processor, metal will be valued and re-injected into the metal industry. Source

Credit Card Networks: What Are They and How Do They Work?

 

When you use your credit card or a digital wallet to make a purchase, a credit card network goes to work behind the scenes. In seconds, it connects your card issuer and the merchant’s bank to process the transaction. In general, credit card networks manage the systems needed for credit card transactions. But there’s plenty more to understand.

What is a credit card network?

Credit card networks build and maintain the technology behind credit card authorization and payment processing. These networks connect card issuers and banks to help make purchases possible. For example, the network must check with the issuing bank to make sure there’s enough available credit to approve the purchase. American Express, Discover, Mastercard and Visa are the four major credit card networks in the U.S. The credit card network logo can usually be found on the front or back of a credit card.

Credit card network vs. credit card issuer: What’s the difference?

Credit card issuers are financial institutions that supply credit cards. Credit card networks run the technology that processes card payments—among other functions. In other words, the credit card issuer is the one you’ll be paying back for your purchases. For example, Capital One is a credit card issuer that works with the networks Mastercard and Visa.

Can a credit card issuer also be a credit card network?

Credit card issuers and networks are usually separate entities. But there are two exceptions—American Express and Discover. These credit card networks also issue credit cards. And they’re referred to as closed credit card networks. Networks that also issue cards act as the acquirer, which means they process the transactions and also pay the merchant for what’s owed for each transaction, minus any fees.

Types of card networks

Generally speaking, there are two major types of credit card networks:

Four-party networks: In a four-party network—also known as an open network—the credit card network relies on third-party financial institutions, such as banks, to issue and distribute cards to customers. Examples of four-party credit card networks include Visa and Mastercard. 

Three-party networks: In a three-party network—also known as a closed network—the credit card network acts as the card processing network and the card issuer. Three-party networks process payments on behalf of merchants and generally don’t allow third-party institutions to issue their credit cards. Examples of three-party credit card networks include Discover and American Express.

How do credit card networks work

To better understand how credit card payment networks work, it may help to look at an example transaction.

Let’s say you’re filling up your car at the gas station. Here’s how a credit card network makes the purchase happen:

• Using a card or digital wallet, you tap, swipe or insert a credit card at the gas pump or inside the store at the register. 
• The gas station’s point-of-sale (POS) system reads your card information and sends it to the gas station’s bank—called the acquiring bank—to request a charge.
• The acquiring bank sends the request to the credit card network.
• The credit card network contacts the card issuer to authorize and approve the transaction.
• If the card issuer approves, the credit card network gives the go-ahead to the POS system and charges a processing fee.

Credit card networks work with credit card issuers and merchant banks to process cardholder transactions quickly and securely. It helps to know which credit card network is linked to your card—just check the logo on the front or back. And keep in mind that it can be smart to have cards from different networks so you’re more likely to be able to pay with a card anywhere you go. Source

Happy Labor Day!

 

“Start where you are. Use what you have. Do what you can.” — Arthur Ashe

Happy Labor Day from us at Bankcard Processors LLC to all of you. Enjoy your weekend.

CA 916-518-5195

jphaire@bankcardprocessors.biz

Payment Processors 101

 

Businesses that accept electronic payments through multiple channels—in-person, online, and mobile—need to work through various complexities. This includes selecting a suitable payment processor, an important decision that can affect long-term success and impact multiple parts of the business.

As more businesses expand globally, there is a growing need for multi-currency and localized payment options. To address these evolving demands, business owners and entrepreneurs should be well-informed about the key factors to consider when choosing a payment processor.

What is a payment processor?

A payment processor is a company or service that facilitates electronic transactions—such as payments made with credit cards, debit cards, or digital wallets—between businesses and their customers. Payment processors enable businesses to accept various forms of payment securely and quickly and facilitate the transfer of funds from the customer's account to the business's account.

What do payment processors do?

Payment processors play an important role in the electronic payment ecosystem, enabling businesses to accept and process various forms of payment from customers. Here's an overview of the primary functions of a payment processor:

Transaction facilitation

When a customer makes a purchase, the payment processor receives the transaction details and securely transmits this information to the appropriate parties, including the issuing bank (customer's bank) and acquiring bank (business's bank), via the card network.

Authorization and authentication

The payment processor requests authorization from the issuing bank to ensure the customer has sufficient funds or credit available. It also verifies the customer's identity and the validity of the payment method to minimize fraud and unauthorized transactions.

Encryption and security

To protect sensitive financial data, payment processors use encryption and tokenization to securely transmit transaction data between the customer, business, and banks. They also need to comply with the Payment Card Industry Data Security Standard (PCI DSS) to maintain a secure environment for handling cardholder information.

Settlement and funding

Once a transaction is authorized, the payment processor coordinates the transfer of funds from the issuing bank to the acquiring bank. The merchant account is then credited with the transaction amount, minus any applicable fees.

Data for reporting and analytics

Payment processors produce data about customer payments that can be used to generate transaction reports, analytics, and insights to help businesses track sales, identify trends, and manage their businesses more effectively.

Fraud detection and chargeback management

Payment processors use advanced algorithms and tools to monitor transactions for fraudulent activity, helping businesses minimize their exposure to fraud. They may also provide support and assistance in handling chargebacks and disputes.

Support for multiple currencies and payment methods

To help businesses expand globally, many payment processors offer support for multiple currencies and popular local payment methods. For example, Stripe supports more than 135 currencies, allowing businesses to do business globally and receive payouts in local currencies.

How do payment processors work?

Payment processors facilitate electronic transactions between customers and businesses—but businesses may not be aware of the details of this process. To understand how payment processors work, let's describe a typical payment processing flow in detail:

Customer initiates payment

When a customer makes a purchase, they provide their payment information—such as a credit card or digital wallet—to the business. This can occur in-person at a point-of-sale (POS) terminal, online through an e-commerce website, via a mobile app, or through payment links.

Transaction data encryption

The business's payment system encrypts the transaction data, ensuring it is securely transmitted to the payment processor. This encryption helps prevent fraudulent actors from intercepting and misusing sensitive customer information.

Transaction data transmission

The encrypted transaction data is sent from the business to the payment processor, which then forwards the information to the acquiring bank.

Acquiring bank to issuing bank

The acquiring bank forwards the transaction details to the issuing bank through the appropriate card network (e.g., Visa, Mastercard, or American Express) for authorization.

Authorization request

The issuing bank reviews the transaction details and checks if the customer has sufficient funds or credit available. It also confirms the authenticity of the payment method and the customer's identity, to mitigate the risk of fraud.

Authorization response

If the issuing bank approves the transaction, it sends an authorization code back to the acquiring bank through the card network. If the transaction is declined, the issuing bank sends a decline message with a decline code that explains why the translation was not approved.

Processor receives response

The payment processor receives the response from the acquiring bank and forwards it to the business. If the transaction is authorized, the business can proceed with the sale. If it's declined, the business must request an alternative payment method from the customer.

Transaction completion

Once the transaction is authorized, the business delivers the goods or services to the customer. At this point, the transaction is considered complete, although the actual transfer of funds is still yet to occur.

Capture and settlement

“Capture” refers to the transferring of funds from a customer's account to a merchant account for a particular transaction. Typically, at the end of the day, the business sends a batch of authorized transactions to the payment processor for settlement. The payment processor then submits this batch to the acquiring bank, which initiates the process of transferring funds from the issuing bank to the merchant account. This transfer usually takes 1–3 business days, depending on the specific processor and bank involved. Source

Accepting Cryptocurrency

 

What is Cryptocurrency? 

Cryptocurrency is a digital currency that allows people to exchange value without a bank or government. It's a type of electronic cash that exists only as a digital token on a blockchain. Cryptocurrency has been a popular subject for quite a while now. As a consumer, you may be intrigued by it. Maybe you’ve already used it to buy goods and services. Or perhaps you’ve invested in it.

As a business owner, it’s the latest form of payment acceptance to offer your patients. So even if cryptocurrency isn’t on your radar otherwise, it’s important to consider it in terms of your practice.You want to make it easy for your patients to pay for services and supplies however it’s convenient for them. If they start asking about cryptocurrency as an option, you want to be prepared.

The process is similar to how you accept credit cards. Whether you use a credit card terminal, payment form, invoice or shopping cart, it’s a realistic, no-hassle option for your patients. Plus, there are no chargebacks!

NetCents

You can work with NetCents to easily integrate cryptocurrency payments into your practice. It’s basically like a virtual terminal or payment gateway. As long as you have internet access, you’re able to use it.

NetCents allows your patients to choose from popular cryptocurrencies, including Bitcoin, Litecoin, Ethereum, Bitcoin Cash and more. One important thing to note is you don’t have to receive the payment as cryptocurrency. You can choose to accept it as US dollars that go right into your account. You just may be surprised how easy it is for both in person and online transactions.

In-Person Transactions

As long as your patient has a crypto wallet set up on their smartphone, it’s a painless process.

• Countertop Terminal: If you prefer a terminal, we do have an option compatible with cryptocurrency. All you have to do is open the NetCents app, and you’re ready to accept the cryptocurrency payment.
• Smartphone, Browser, or Tablet: If you need to accept payments outside of your practice, or want another in-person option, you can use a smartphone, browser, or tablet.

Online Transactions

Your patients don’t have to be in your practice to pay with cryptocurrency. They can pay their bill or buy vitamins from you online by using one of these techniques;

• Shopping Cart/Payment Form: If your practice has an online presence with a payment form or shopping cart, accepting cryptocurrency is as easy as a credit card. 

Invoice: From your dashboard, you can create an invoice to send to your patient. When they open the invoice, there will be a QR code for them to scan. That’s when the customer takes out their smartphone with the crypto wallet to pay with their preferred cryptocurrency.  

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