The concept basics of network tokenization
Due to currently ongoing processes of tokenization adaptation, there are different branches of its integration into structural elements of financial sector. One of the representations of such process on the official level is network tokenization, which, contrary to the naming, relates more to establishing connection between crypto and popular payment systems. Supported by Mastercard, Visa, American Express and other networks, it is aimed at replacing primary account numbers, card details and following information with issued token. With the help of such move, there will be no more actual need in revealing some sensitive data to the third parties and risking the privacy matters when making a purchase.
What is the principle of work in network tokenization
If general cryptocurrency operations reveal the identity of the owner or receiver of transaction at the certain step, the network tokenization ensures the token usage during every part of operation performance, keeping the information fully private. There will be no need in registering another card attached to cryptocurrency operations only, as the token is issued by the credit card brand directly.
The main benefits of tokenization in payment systems
Although this process requires a lot of time before becoming the common thing, the perspectives brought by network tokenization promise to bring a lot of opportunities to their holders, as:
- No more need in constant verification. The tokenization allows the data to be updated automatically, removing the issue of having to change the card after loss, fixed period of time or any other cases.
- Updated privacy protection. An unauthorized party will never get the information about the card holder, excluding possibilities for leaks or fraudulence, which is currently an issue with many owners.
- Ability to choose the payment method. There will be no obligation in choosing only fiat money or crypto, instead letting to choose the most suitable option for each case.
- Reduced time of execution. The blockchain, especially built in multichannel manner, can handle quite the load with minimal estimated time of transaction performance.
- Lower fees per operation. With operations being held in one dimension, there will be no urge in conversion of funds, commissions for different nuances and more unreasonable details that hold user from making the payment.
Both for business-to-business and business-to-consumer relationships the integration of network tokenization will be a beneficial move towards more high-quality and safer experience that will no longer require long awaits of operation completion with quite immense network loading, slowing down the processes due to need in verifying the actions, fearing for data or asset being stolen. With crypto integration into financial system, the result of symbiosis will greatly reduce the amount of issues to deal with while presenting smooth performance of overall sector structure.