Tokens are a replacement for existing RT (routing transit) and account numbers. For businesses that use DDA (demand deposit account, a.k.a. checking account) account numbers for payment processing, there are several benefits created by replacing regular DDA account numbers with tokens:
- Tokens provide advantages that are good for a business’s customers, and as a result, the business itself. The customer (account holder) benefits from a separation between their real account information and the token that can be shared with billers, disbursers and other entities that store their account information on file. If any of the locations that hold the token are hacked and the token is stolen, the account holding financial institution can replace the token without impact to the real account.
- Entities that store DDA account numbers-on-file benefit from tokens because they can lower their risk from a hack or breach. Tokens may lower consumer impact from stolen account data which can help with brand reputation after a negative event. Additionally, using tokens for DDA accounts provides protections on par with the tokens used to protect card transactions and can be part of a comprehensive risk practice.
- Tokens can also help address some types of fraud. Most notably, tokens stolen during a breach can be turned off, and once de-activated cannot be used for fraudulent transactions. When used in the RTP Network, Tokens may also have additional controls (such as counterparty restrictions) that can help to prevent fraud by validating that a token is only used by the party that it was issued to.