Thales has shed some light on the future of cybersecurity with a new blog post that explains how the financial industry is leveraging tokenization technology to reduce the threat of data breaches and online credit card fraud. The company notes that while PINs and chips have lowered the amount of fraud that is carried out with physical cards, cybercriminals will still hit online retailers for $130 billion in Card-Not-Present fraud between 2018 and 2023.

Tokenization represents a potential solution to that problem. The process generates a unique token that is tied to a user’s credit card. Once that token is created, consumers can share it with digital retailers to make an online purchase, and a given retailer can exchange the token with the bank to process payment.

The upshot is that consumers with a token will never need to share their credit card number with a digital merchant. That information is securely stored with the bank (and only the bank), and will not be exposed even if the retailer experiences a data breach.

“Tokenisation protects digital banking and eCommerce customers from cyberattacks on all their devices,” explained Thales Digital Banking and Payments Marketing Manager Xavier Larduinat.

“Consumers like tokenisation because it increases eCommerce security and convenience; merchants like it because it reduces fraud; and banks like it because it boosts traffic to their mobile sites and transaction fees.”

The tokens themselves function like casino chips, in the sense that a token can only be exchanged for payment at the bank that issued the original token. The token can be carried over to a new card when the old one expires, and will also allow consumers to consolidate and view digital wallets and merchant accounts through their bank’s website.

Thales offers tokenization services as part of its risk management and anti-fraud portfolio. The company recently collaborated with Verint to produce a comprehensive Cyberthreat Handbook, and its tech has since appeared in a limited edition biometric payment card in Switzerland.