When Global Payments Inc. last March revealed it had suffered a data breach, executives at tokenization vendor Protegrity USA Inc. began what amounted to a verbal campaign calling for fraud liability to shift to processors.
Elavon Inc., a unit of Minneapolis-based U.S. Bancorp, must have thought Protegrity was onto something. It became the first major processor to include Protegrity's advanced tokenization as part of its Safe-T Suite card-data security software.
Protegrity, of Stamford, Conn., announced its tokenization product for processors a month after the Global Payments breach was disclosed. The technology allows processors to replace sensitive card data with a secure value that is worthless to fraudsters if it is stolen, while also eliminating the need for numerous computer database “vaults” for token storage.
When Protegrity announced its product, Aite Group fraud expert Julie Conroy McNelley said it had perfect timing, considering processors were eager to double-check and analyze their systems.
Elavon plans to use Protegrity's tokenization as a key component on the back end of its Safe-T Suite system, says Jeff Sledge, director of business development for Protegrity.
"As a payments processor and a gateway service provider, Elavon will use end-to-end encryption [for data] on the front end [of a transaction], and the tokenization on the back-end, with the tokens being delivered back to the merchant to keep card data off of the merchant systems," Sledge explains.
Because Protegrity's advanced tokenization eliminates the need to store tokens in several databases, processors and gateways will be able to lower hardware costs, he adds.
Elavon's processing system won't have to change to facilitate the tokens, says Raul Ortega, vice president of business development for Protegrity.
However, Protegrity will have to "add functionality" to its advanced tokenization software as Elavon adds more merchants to its Safe-T Suite service, Ortega says.
Eventually, Protegrity will move the tokenization process into new phases for clients such as Elavon, Ortega suggests.
"Right now, we are dealing with the payments side of the business," Ortega says. "But in working with these same merchants, we can also protect customer data, employee data and, if needed, health data as we expand tokenization into new markets."
For now, Elavon will have the flexibility to establish "token clusters" if needed in different parts of a country, Ortega says, referring to establishing locations in which one computer handles tokens for hundreds of merchants.
"Anyone not using the advanced tokenization is running into big costs because there are too many databases involved and the wiring of those databases gets very complex," Ortega says.
Robert McMillon, vice president of global security solutions for Elavon, points to tokenization as a key aspect of the company's system.
"We are consistently looking to bring the highest level of security to our customers," McMillon stated in a press release. "Protegrity's tokenization technology is a key component of our end-to-end solution that helps merchants protect sensitive data throughout the transaction lifecycle — while it is in use, in transit and at rest."
Elavon previously had tokenization included in its security system for point-of-sale and e-commerce merchants, but chose Protegrity's advanced product because it could add more merchants without driving up hardware costs, Sledge says.