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How mobile payment services help protect you

May 18, 2017

By Pam Leibfried

A lot of the buzz about digital wallets and mobile payment services (like Visa Checkout, PayPal, Android Pay, Apple Pay and Samsung Pay) has centered around their security and how they can help protect your information if it’s compromised in a retailer data breach. 

But, very little of the media coverage has explained why you can feel safer when you pay – which you may be wondering about each time you hold your smartphone up to the payment terminal or log into your digital payment service when checking out online.

Mobile payment security is complicated, and each transaction involves security procedures used by the retail outlet, the credit card company and the bank or credit union that issued the card. Because of this, explanations of mobile payment security are often filled with technology jargon about encryption and other high-tech processes, and they can read like a foreign language to the average person. Although it can seem confusing, one of the key parts of the security offered by mobile payment services is easy to understand: tokenization.

Tokenization was described by IT newsletter ZDNet as “one of the most secure and fraud proof payment mechanisms available.”

So how does it work? In payment systems that use tokenization, the valuable information – in this case, your 16-digit credit or debit card number – is replaced by a number, called a “token.” The token is a randomly generated, unique number assigned for a specific merchant. So, when you pay, the store, retailer or restaurant only has the token number. Since they don’t get your real card number, your accounts are protected.

If you pay a retailer using a mobile payment service and that retailer is hacked, your actual credit or debit card number won’t be compromised – even if your transaction data is obtained by fraudsters. They’ll only get the token, and because your token is unique to that merchant, it can’t be used to make purchases anywhere else.

Alliant members: Check out our FAQs to learn how you can use your Alliant Visa debit or credit card with digital and mobile payment services


Pam Leibfried is a marketing content specialist whose love of words led to a writing and editing career. After a brief stint teaching English, she transitioned to corporate communications and spent 20 years at The Nielsen Company before joining Alliant’s content development team. Early in her work life, Pam’s friend Matt explained the benefits of a 401(k) and her dad encouraged her to start a Roth IRA. Their good counsel prompted her to prioritize retirement savings, which just might enable her to retire early so she can read more and live out the slogan on her fave T-shirt:  “I have a retirement plan: I plan on quilting.”