Rambus has just announced the launch of its Payment Account Tokenization solution to secure account-based transactions, such as automated clearing house (ACH) and real-time payments. The solution will enable central banks and clearing houses to replace sensitive account numbers with unique tokens, and reduce the impact of fraud for transactions including direct credit, direct debit and person-to-person (P2P) payments.
What is Payment Account Tokenization?
Payment Account Tokenization secures account-based payments by replacing the valuable account credentials with a cryptographic token. This process significantly reduces the risk and impact of account-based fraud as the foundation of a safe and secure instant payments framework. When implemented by a centralized body, like a central bank, Payment Account Tokenization reduces fraud and enables key use cases like P2P, direct credit, and push payments in real-time.
The new tokenization technology enables real time payments, processing account-based transactions faster and safer than ever before, according to Bret Sewell, SVP and General Manager of the Rambus Security Division.
Payment Account Tokenization consists of many primary features, such as account-based tokenization, which eliminates the need to store and transmit sensitive account information, life cycle management, which enables banks to link, suspend, (re)activate or unlink tokenized bank account numbers, and domain controls, which limit token usage to a specific channel, merchant or spending limit by applying a set of parameters.
Other features include cryptogram protection, which generates application cryptograms, fingerprints of the transaction, prior to a payment and validates them during a transaction and a token vault, which a secured repository, or database, that establishes and maintains the payment token to Sending/Receiving Account number mapping.
Jordan McKee, a principal analyst at 451 Research noted that as payments have gone digital, they have gotten faster and easier, which has given rise to account-based transactions. Fraudsters, seeking the path of least resistance, have made note of this trend and “are increasing their focus on account credentials, given their disbursement across many fields, such as e-commerce websites, mobile and P2P wallets, invoices, and payroll.” He goes on to say that to protect consumers and better thwart fraudsters, businesses need to implement security measures that do not need to use sensitive information in the transaction flow.
The Bottom Line
The introduction of real-time payments increases risk for financial institutions, as they now have seconds instead of days to identify fraudulent transactions, and it logically follows that fraudsters will seek the path of least resistance. By removing account numbers from the transaction process completely, tokenization can significantly reduce the risk and impact of account-based fraud and create secure real-time payments frameworks.
To learn more about Payment Account Tokenization, visit www.rambus.com/pat.