Tokenization Service Decoupling for Merchant Flexibility
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Solution Overview
Problem
Current tokenization systems are tightly coupled with payment authorization services, limiting merchants' ability to use payment tokens independently, which defeats the purpose of tokenization by requiring them to handle actual payment data when using different service providers.
Innovation Solution
Decoupling tokenization services from payment authorization services, allowing merchants to offer tokenization as a standalone service (TaaS), enabling the sharing and use of payment tokens across different entities without handling actual payment data.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Ease of operation
If tokenization service is coupled with payment authorization service, then transaction processing is simplified, but merchants cannot use payment tokens independently with different service providers
Solution Approach 1:
The patent separates the tokenization service from the payment authorization service into independent components. The tokenization service generates and manages payment tokens independently, while the authorization service processes transactions. This segmentation allows merchants to use tokens with different authorization providers, achieving both operational simplicity and merchant flexibility.
2Productivity
If merchants handle actual payment data for transactions, then transaction processing is straightforward, but PCI compliance costs and risks increase
Solution Approach 1:
The patent creates a copy of payment data in the form of a token that represents the original payment account information. Merchants handle only the token copy instead of the actual sensitive payment data, maintaining transaction processing efficiency while eliminating PCI compliance requirements since tokens are not considered sensitive payment information.
3Adaptability or versatility
If tokenization service is decoupled from payment authorization service, then merchants can share payment tokens across entities, but system complexity increases
Solution Approach 1:
The patent creates a universal token format that can be used across multiple entities and service providers. The token structure and validation mechanism are designed to be provider-agnostic, allowing the same token to be accepted by different authorization services. This universality enables token sharing without requiring complex proprietary integrations for each provider.
Data Source
AI summary
Systems, devices, apparatuses, and methods for providing tokenization as a service are provided. Embodiments of the invention involve decoupling “tokenization service” from other services offered by a merchant service provider, and offering the tokenization service as a stand alone service. In accordance with an embodiment, a merchant service provider can receive payment data associated with a transaction between a consumer and a first entity. The merchant service provider can generate a payment token that represents the payment data and transmit a copy of the payment token to the first entity. The first entity can then transmit the payment token and order information to a second entity specified in the transaction. The merchant service provider can subsequently receive a request to complete the transaction from the second entity. The request can include the copy of the payment token from the second entity.