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WHAT IS A TOKEN SERVICE PROVIDER?
To increase the security of mobile payments, many payment schemes nowadays apply a technology called tokenization.
Tokenization is the process of replacing an existing payment card number with a surrogate value (token).
This token is used during a payment transaction, keeping the original card number safe.
What is a Token Service Provider?
A Token Service Provider (TSP) is an entity within the payments ecosystem that generates and manages tokens.
Token Service Provider
BankCustomerNFC POS
Acquirer Payment network
The TSP maps the original card number with the payment tokens and stores this safely in a token vault.
Often these tokens can only be used in a specific domain such as a merchant’s online website or channel, limiting the risk even further.
Responsibilities of a Token Service Provider
A TSP manages the entire lifecycle of payment credentials including:
Token Requestor Authorization Host
1. Tokenization:
Replaces the PAN with a payment token.
2. De-tokenization:
Converts the token back to the PAN using the token vault.
3. Token vault:
Establishes and maintains the payment token to PAN mapping.
4. Domain management:
Adds additional security by restricting tokens to be used within specific (retail) channels or domains.
5. Identification and verification:
Ensures that the payment token is replacing a PAN that was legitimately used by the token requestor.
6. Clearing and settlement:
Ad-hoc de-tokenization during clearing and settlement process.
Why Become a Token Service Provider?
Issuers, acquirers and merchants that wish to offer mobile and/or digital payments to customers can become a TSP.
Becoming your own TSP gives full control over the tokenization process: creation, storage, issuance and management.
Having your own TSP
vs. third party TSP
By having your own TSP, you are in full control of digital payments by issuing tokens directly without third party intervention.
By using a third party TSP from the payment schemes, issuers need to integrate with each payment scheme.
Benefits of having your own TSP:
1. Reduce long term costs: no additional TSP fees from the payment schemes.
2. On-us transactions: save on transaction fees when you are the issuing as well as the acquiring bank.
Issuing and acquiring bank
3. Banks retain their privacy because data and roadmaps do not have to be shared with the schemes.
4. Keep track of customer payment behavior to gain valuable insight and be able to offer personalized services.
5. Expand to multiple use cases.
Host Card Emulation
Embedded SE
Internet: Card-Not-Present
Value added services/ non-card payments
6. Have your own strategy and be future proof in order to stay competitive.
Bell ID® Token Service Provider
Bell ID® Token Service Provider enables issuers and processors to perform the role of a Token Service Provider:
Transaction Management enables issuers to validate cryptograms and assurance levels and do the PAN processing.
Tokenization Management replaces confidential consumer card data with payment tokens.
Secure Element Management enables banks to provision card data and keys to a physical secure element.
Cloud-Based Mobile Payment Management issues and manages cloud-based payment cards to perform NFC transactions based on HCE.
Bell ID implementations worldwide:
Download Bell ID®Token Service Provider
With over 20 years of expertise, Bell ID is considered the world’s leading provider of lifecycle management solutions for tokens (e.g. smart cards, mobile NFC phones) deployed in single and multi-application programs.
www.bellid.com
Martin CoxGlobal Head of [email protected]
