New York – The Clearing House today announced the expanded adoption of its Token Service, a next-generation bank account tokenization solution designed to protect the information associated with bank account numbers and help mitigate risks associated with fraud and data breaches across the financial ecosystem.

When a client links their account information with a third party, tokenization replaces sensitive payment account information with a “token,” protecting consumers by concealing their actual bank account numbers so they are not shared. The service, which is available for ACH transactions on the EPN® network and for instant payments on the RTP® network, is now being adopted more broadly by banks, setting an industry standard and paving the way for new applications for payments, data security, and fraud risk mitigation.

The Clearing House and participating banks have deployed tokens to improve security in open banking, where data aggregators and fintechs retrieve and store large volumes of consumer account data. In the past, “screen scraping” practices left sensitive account and payment initiation data exposed and at risk if compromised. The shift to API-based data sharing with customer permissioned authentication creates a natural foundation for scaling tokenized account number distribution and empowering customers to periodically review permissions for third party data access.

"At PNC, protecting our customers’ financial information is at the core of everything we do,” said Natalie Talpas, Executive Vice President, Head of Retail Digital and Emerging Payments Strategy at PNC. “By working with The Clearing House to expand the use of tokenization, we are providing consumers with greater security and control over how their account data is shared and used. This advancement not only helps reduce fraud but also builds the trust and confidence necessary for the continued growth of open banking in the U.S."

Tokens for bank account numbers deliver security and control, allowing customers and their banks to store account details more safely and manage when and how a token can be used for payments. By replacing sensitive account numbers with secure tokens, the service significantly reduces the risk of bank account data being used for fraud or being exposed during data breaches.

"Tokenization represents an important step forward in protecting sensitive account data and improving the overall customer experience,” said Dominic Venturo, Senior Executive Vice President and Chief Digital Officer, U.S. Bank. “By adopting The Clearing House Token Service, we’re able to provide our customers with even stronger safeguards against fraud, while also enabling more seamless and secure ways to share their financial information. This innovation further strengthens trust with our customers for digital banking services, but also lays the foundation for new products and services that meet the evolving needs of our clients."

Wider Bank Adoption and New Applications
Banks are now integrating directly with the Token Service for token issuance and working with third parties to distribute tokens on their behalf. This growing utilization of bank account number tokens will enable new applications, such as tokenizing “account-on-file” data held by large merchants and billers—entities that manage vast stores of account information, which heighten data breach risks.

Enhanced Fraud Management and Customer Experience
Beyond prevention, the Token Service offers a powerful method to respond to fraud events such as data breaches. Tokens can be re-issued without closing or reopening the underlying account, avoiding major disruptions for customers and reducing servicing costs for banks. While other forms of account data masking exist, tokenization at the network level—where The Clearing House processes payments—offers a higher level of security. Tokens remain intact throughout the payment journey until they reach the network, where they are detokenized and can have bank-defined rules applied.

“With expanded adoption of the Token Service, we are providing banks and their customers a safer, more flexible way to store and use account information,” said Jeff Williams, Senior Vice President, Product Development, at The Clearing House. “By embedding security at the network layer, we’re reducing the risk of fraud while opening the door to new, innovative applications across the payments ecosystem.”

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