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A Cybersource guideA guide to networktokenizationWhy tokenizationThe arrival of network tokensCybersource Token Management Service 2022 Cybersource. All rights reserved.

WelcomeWhytokenizationPaymenttokenizationToken ManagementServiceGettingstartedContents3WelcomeWhy are we talking about tokenization?4Why tokenizationCreating secure and seamless payments is harder than it sounds5Payment tokenizationHow it works, why it’s important8Cybersource Token Management ServiceThe enormous benefits for business16Getting startedHow Cybersource can help 2022 Cybersource. All rights reserved.A guide to network tokenization2

WelcomeWhytokenizationPaymenttokenizationToken ManagementServiceGettingstartedWelcomeThe payments revolution ishappening all around us, and it’simpossible to ignore. Nor shouldany business want to ignore it:from the opportunity to servecustomers worldwide to thesimplicity of going cashless,digital commerce is providingbenefits at every level.Of course, with new opportunities inevitablycome new challenges. Customers now expectsimple and consistent payment experiences,but payment environments keep growing morecomplex. And while worldwide digital commercegrew 27.6% in 2020/21, 2020 also saw a 20%rise in security breaches.1But as so often happens, necessity has bredinvention. New tokenization technology isfundamentally changing how sensitive paymentdata are managed.While solving security challenges, tokenizationalso helps businesses create seamless paymentsexperiences that are making a material differenceto conversion and revenue.This guide will show you how payment tokenizationcan benefit your business, and of course, howCybersource can help.1 Gibson Dunn, U.S. Cybersecurity and data privacy council outlook and review, Jan. 28, 2021 2022 Cybersource. All rights reserved.A guide to network tokenization3

WelcomeWhytokenizationPaymenttokenizationToken ManagementServiceGettingstartedWhy tokenizationSo why is creating seamless payment experiences so hard?The problem stems from the risks associated with sensitiveaccount data.The current payments ecosystem still relies on customeridentifiers consisting of personal account numbers (PANs),billing addresses, expiration dates, and card security codes.“ Digital commerce presentsnot only huge opportunities,but also a particular setof challenges: transactiondecline rates, online fraud,and the customer’s paymentexperience. At the sametime, keeping up withrapidly evolving technologyis becoming increasinglycomplicated.”Jignesh KachariaVice President, Product ManagementCybersource8.4billionrecords were exposed inQ1 2020, 273% vs Q1 2019 2Used online, these account details draw the attention offraudsters looking for ways to exploit the data on an industrialscale, so businesses must bear the cost of keeping them safe.Equally, if these identifiers are compromised, it’s hard forbusinesses to tell if they’re being used legitimately. 8.19millionthe average total cost perbreach in the U.S. in 2019 3The result is that businesses are faced with a no-win situation:decline any transaction that looks remotely suspect andnegatively impact sales or accept all transactions and riskfraud and reputational damage.2 8.4 Billion Records exposed in Q1 2020, Security Magazine, May 12, 20203 Marty Puranik, What is the Cost of a Data Breach? Forbes, Dec. 2, 2019 2022 Cybersource. All rights reserved.A guide to network tokenization4

WelcomeWhytokenizationPaymenttokenizationToken ManagementServiceGettingstarted1 2 3Payment tokenizationTokenization technology arrived nearly two decadesago and is now at the heart of keeping data securewithin the payment process. Almost all businessescurrently use tokens to some extent to prevent fraud.How tokenization works1. A customer’s PAN is replaced with a uniqueidentifier created by a seller’s in-housesystem, an acquirer, or a payment platform.2. Crucially, the token bears no mathematical linkto the PAN and cannot be reverse engineeredto uncover the PAN—even if a fraudster gainsaccess to it.3. The real PAN is stored securely by the acquireror gateway and is at no point revealed to theseller or used in processing payments.PANPANPANCustomerMerchantAcquirer bankThe concept of using a token tosafeguard something of value is nothingnew: think of chips in a casino or tokensin an arcade. Payment tokens follow thesame principle.Tokenization means a customer’ssensitive account data is replacedwith a digital identifier while the realdata is stored securely. If the tokenis compromised, it is meaningless andcannot be used. 2022 Cybersource. All rights reserved.Card networkIssuer bankThe result is win-win. Customers don’thave to worry about their accountdetails being vulnerable online, andbusinesses don’t have to worry aboutkeeping sensitive data safe within theirown environment.The widespread moveto tokenization is wellunderway.A guide to network tokenization5

WelcomeWhytokenizationPaymenttokenizationToken ManagementServiceGettingstarted1 2 3The arrival of network tokensA major step forward in tokenization has been the arrival ofnetwork tokens, which unlock higher authorization rates,lower fraud, and create a better customer experience.The first payment tokens were issued by sellers, acquirers,or payment platforms for individual credentials. In contrast,network tokens are generated by a payment network suchas Visa. Instead of replacing a single PAN for its lifespan, theyrepresent a customer’s credentials for the entire buying cycle. 2.2%Authorization ratesThe ability to recognizemore legitimate repeatcustomers is proven tolift conversion rates byan average of 2.2%.4-26%What this means is that, at the point of initial payment, a businesscan ask the network to generate a token that can then be used(and importantly, tracked) for all subsequent transactions, evenif the card has been replaced by the cardholder. The credentialswill automatically be updated via lifecycle management, be it fora card or a digital wallet like Google Pay.FraudNetwork tokenization canreduce fraud by an averageof 26% without creatingadditional payment frictionfor your customers.5This allows businesses to recognize their customers andunderstand them better, enabling higher authorization ratesas well as fraud reduction.4 Visa global card-not-present transactions for token vs non-tokenized credentials, May–July 20215 CNP & CP Average is for set of Token participating Merchants (by Merchant DBA) (PAN & Token)with digital wallet TRs April–June 2018, Issuer region: US 2022 Cybersource. All rights reserved.A guide to network tokenization6

WelcomeWhytokenizationPaymenttokenizationToken ManagementServiceGettingstarted1 2 3Network tokenization madeeasy by CybersourceCybersource can accelerate your business’s adoptionof emerging network tokenization technologies witha suite of fast, comprehensive solutions.We are a Visa solution with tremendousglobal scale, serving 190 countries andterritories.Cybersource acts as a bridge to network tokenizationfor Visa and Mastercard and will soon include AmericanExpress and Discover. Our brand-agnostic global accessand network token expertise can help you maximize thebenefits of network tokenization, regardless of whereyou are on the journey. 2022 Cybersource. All rights reserved.A guide to network tokenization7

WhytokenizationWelcomePaymenttokenizationToken ManagementServiceGettingstarted1 2 3 4 5 6 7 8Cybersource Token Management ServiceToken Management Service is the simplest way foryou to maximize the potential of network tokenizationand become an early adopter of new innovations andomnichannel experiences.The power behind Token ManagementService lies in Cybersource’s supertoken, which links network tokensfrom different card brands (such asVisa and Mastercard), banks, paymenttypes, and channels together.Cybersourcesuper tokenCard brands 2022 Cybersource. All rights reserved.BanksPayment typesThis super token centralizes andsimplifies the management of previouslyseparate tokens and payment types,making it possible to create a completetransaction history for each of yourcustomers. You get a 360-degree viewof your customers’ shopping habitsacross different channels, and you canmake customer loyalty and rewardsopportunities part of every online,mobile, and in-store transaction.If you offer multiple card brands youcan see a customer’s activity acrossall of them, too.ChannelsA guide to network tokenization8

WelcomeWhytokenizationPaymenttokenizationToken ManagementServiceGettingstarted1 2 3 4 5 6 7 8The super token:A Cybersource innovationCybersource’s proprietary network token linkspayments, customer data, and other network tokensto create a super token.Links tokensfrom differentnetworks, issuers,and channels.Includesalternativepayments.Creates a unifiedview of yourcustomers.Makes paymentssimple and safe.Only Cybersource Token ManagementService offers a proprietary networktoken that links tokens from differentnetworks, issuers, and channels to helpresolve the tension between simplepayment experiences and complexenvironments.Token Management Service improvescustomer experience by creating aunified view of your customers and theirbuying behaviors across channels andpayment methods, seamlessly updatingpayment credentials to provide asmooth path to improved conversion.Cybersource’s super token not onlyconnects data from all card types andissuers, it includes alternative paymentssuch as eCheck, ACH, and other debitproducts. The super token powers ourToken Management Service in managingcustomer data, simplifying customermodels, keeping credentials refreshed,and reducing PCI compliance scope.And it integrates seamlessly with otherCybersource solutions, such as DecisionManager, Payer Authentication, AccountTakeover Protection, Recurring Billing,Global Gateway, and others.Using Token Management Service makespayments simple and safe for yourcustomers—no matter how complicatedthings get behind the scenes. 2022 Cybersource. All rights reserved.A guide to network tokenization9

WelcomeWhytokenizationPaymenttokenizationToken ManagementServiceGettingstarted1 2 3 4 5 6 7 8The benefits of CybersourceToken Management ServicePayment options your customers loveBy helping you understand your customers’ shoppinghabits across payment methods, networks, and channels,Token Management Service enables:One-click checkout options using cardon-file information across differentchannels.More ways to pay, including digitalwallets, direct debit, Click to Pay, ACH,online bank transfers, international andregional cards, and whatever else is thenext big thing. 2022 Cybersource. All rights reserved.Personalized payments that usecustomers’ cross-channel paymenthistories and data to pinpoint theirpreferred way to pay.New ways to shop, including buy online,pick up in store (BOPIS), curbsideordering, touchless kiosks, and more.A guide to network tokenization10