Payment Tokens in Card Payment

"There are several distinct types of payment tokens in payments:

🔹 Acquirer tokens are generated by acquirers when they process cardholder transaction requests on behalf of merchants. Acquirers typically return these tokens to merchants in their transaction response. Acquirer tokens are specific to acquirers - that means they generate them, own them and are the only ones who can use them.

🔹 Issuer tokens are generated by card issuers for specific use cases, including card-based applications such as Apple Pay, Google Pay and Samsung Pay. These tokens are usually provided to a cardholder's mobile app, card chip or wallet applications. Issuer tokens belong to the issuer, instead of the merchant, and so may not be as useful for facilitating customer journeys within a merchant's environment.

🔹 Network or scheme tokens are generated by the Visa, Mastercard, American Express, Discover, JCB and China UnionPay credit card networks. Each card network operates its own scheme token service. As a result, network or scheme tokens are similar to issuer tokens, with the key distinction that they're generated by card networks, not issuing banks.

🔹 Payment tokens are a relatively new variant of issuer tokens, generated on behalf of at least one card issuer in a framework known as a token program. Merchants and cardholders can request these tokens for specific use cases. For example, a cardholder may request a device-specific token if they initiate a transaction through a mobile application.

🔹 Merchant tokens are generated specifically for a merchant by a provider of its choosing. The provider generates a merchant token after a cardholder tenders their card for transaction processing.

Even though they're created by a third-party provider, merchants own these tokens. This means merchants can incorporate these tokens into customer journeys and business processes within their environment, as well as use them in conjunction with other tokens. For example, a merchant token can be linked to multiple acquirer and issuer tokens, which enables the merchant to support multiple acquirers. Merchant tokens tend to be multi-use, format-preserving tokens."

Author

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