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Secure credit card processing requires special encryption tools, as electronically-submitted credit card information could easily be intercepted and used for fraud if proper security measures aren’t taken. One of the more important credit card tools is the authentication token. Tokens are basically passwords, PINs and other data used on either side of a connection to prevent data from falling into the wrong hands. Authentication tokens greatly cut down on fraudulent credit card charges and are vital in all types of bank card processing, especially on the Internet. Understanding their use and function is key to understanding credit card security as a whole, since tokens are used in so many different ways for everyday transactions.

Various types of authentication tokens can be used to allow for quicker and more secure credit card processing in different types of environments. For instance, tokens used in online purchases are designed to significantly lower the chances of fraud by requiring passwords and security codes from bankcards. Data is encrypted before it’s sent for authorization, and the information is permanently inaccessible for anyone who doesn’t have access to the proper keys.

On the customer’s end, an authentication token might be a password or PIN number. The other authentication codes used might be accessible but not well-known information — called a public key — such as an account number. By requiring authentication tokens and insisting on at least one private key use in each transaction, electronic credit card processing is made much more secure without an added hassle from the customer’s point of view.

While authentication tokens are usually discussed in reference to Internet credit card processing, they’re used to ensure credit card security in other electronic transmissions as well. ATMs and POS terminals use authentication tokens. Any device which authenticates the identity of a bank card user before allowing processing can be said to use authentication tokens. This means that all processing devices use them in some form or another, as failure to authenticate a credit card user’s identity would be dangerous and potentially illegal. Authentication tokens differ by processing method, but all tokens have to pass certain guidelines before they can be used to secure credit card information and any other secure information.

Businesses should consider how a credit card processing company uses authentication tokens to ensure that proper credit card security measures are being used in day-to-day processing. Authentication tokens are common, but they’re used in very different ways. When tokens are used correctly, point of sale terminals, ATMs and Internet shopping carts are secure and easy to use, which leads to more sales and a lower chance of lost funds due to credit card fraud.