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Use the token to protect against credit card fraud



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Protect your credit cards with token virtual numbers.


Mari Benitez

My son had his first debit card for three months before the number was stolen and used for unauthorized purchases ̵

1; at a cost of approximately $ 1,600. It happened to me at least three or four times. And at some informal opinion polls that I completed, at least 75 percent of Cheapskate readers have experienced this at least once.

That's shit in all respects: it's a pain to call your credit card company, file a fraud report, make sure all charges are canceled, and then update the auto-pay information for any number of services. And it's no fun for your credit card company, as they often have to eat up the losses, which in turn leads to higher fees, interest rates, etc. for consumers.

Good news: There is a tool that can help. Token is a free app that generates virtual credit card numbers so that your primary number is less used, reducing the risk of fraud.

What is a "token"?

Let me clarify a few terms. Although token is the name of the app / service, a conventional credit card or payment system token is actually a different animal. According to CreditCards.com industry analyst Ted Rossman, "Tokenization is a method of securely transferring data behind the scenes, whereas a virtual card number is something a consumer asks for, so he / she does not need to list his / her" real "ones." Credit card number when buying online. "

Ross notes that mobile payment systems like Apple Pay, Google Pay, and Samsung Pay all use tokenization, as do chip-based credit cards, adding," These cards do not protect you online at all "And mobile payment options are not widely accepted, at least for the moment.

A handful of credit card companies, including Citi and Capital One, are already offering virtual number generation, although I'm not sure the process is as easy as it is Token (see below).

However, the benefit of the token service we are examining here is that it works with existing accounts is working. And it's free to use. (The company earns a percentage of the total transaction cost, the "interchange fee," which is associated with all credit card transactions.)

How tokens work

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The token app makes it easy to generate virtual credit card numbers as needed.


Token

You begin by linking to an existing credit, debit, or bank account. Then it generates a new credit card number – a "token" – which you can use once or, if necessary, multiple times.

Token offers right out of the gate to provide you with tokens for things like Amazon and Netflix, the idea is that you exchange this new number for the number you saved. But you can also quickly generate a new token for something, eg. For something you buy online or order by phone.

If you've set up a token, it stays active by default, but you can temporarily freeze it like or delete it altogether. The freeze option is useful if you think you need to retrieve this number later, for example: B. a refund. By the way, tokens automatically and all refunds go directly to your linked payment account – even if the token is frozen.

All this happens through the token app, but soon comes a desktop plug-in for Google Chrome.

Disadvantages of the Token

As you might expect, when you create an account you must provide some personal information, not including your credit card or bank account number. You can and should review the company's privacy policy before signing up and reading the Terms of Use while you're at it.

My biggest concern with using tokens is the potential impact it has on the cash back of your credit card or reward program. According to Yana Zaidiner, co-founder and COO of Tokens, you still earn points when shopping through tokens, but you may not get a multiplier.

For example, suppose you have a card that gives you 2 percent of your money while eating 3 percent on travel and 1 percent on everything else. If you use tokens, you probably only have 1 percent for everything, since every purchase with tokens is traded as a merchant and is therefore not categorized as "food" or "travel."

Zaidiner said this is something The company plans to look into it in the future, and indeed Tokens will also suggest which card to use to maximize your rewards. A physical token card is also in the works for later this year.

Tokens are unlikely to eliminate 100% of fraud cases, but it can certainly help reduce them. The use of the service costs nothing, so it is definitely worth a look.

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