On Thu, Feb 16, 2012 at 09:06:18PM -0800, [email protected] spake thusly:
> If you think about it, any company that bills your credit card
> number repeatedly needs to store the number so it doesn't ask you
> for it each time.

I haven't seen this involve a third party. That would involve the third party
doing the billing to the card processor and taking their cut. To encourage PCI
compliance and cut their own losses card processors often provide their own
tokenization. Some companies (including companies for whom I consult as a
security person in charge of implementing their PCI compliance) tokenize the
card data: They get the card data from the customer the first time then send it
to the card processor who in exchange gives the merchant a token/reference
number.  Next time the merchant wants to charge that customer they just provide
the token/reference number.

The big downside is the merchant is now tied to this payment processor unless
they want to hit up their customers for card data again. Many customers,
especially those on recurring subscriptions, don't even remember that they are
being charged and once they are made aware of it will cancel. Huge losses are
inevitable.

> If you are a big enough business, it may make sense to do this
> internally instead of using a third party.

Yep. PCI compliance for storing card data (SAQ-D) is quite expensive. You have
to have some serious economy of scale to make it worth it.

-- 
Tracy Reed

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