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What is Tokenization

Melissa Good avatar
Written by Melissa Good
Updated this week

Tokenization with Adyen is a secure way to store and reuse a customer’s payment details without keeping sensitive card data on your own systems. It replaces the actual card data with a unique, non-sensitive token that can be used for future transactions like subscriptions, one-click checkouts, or recurring payments.


How Tokenization Works in Adyen

1. Customer Provides Card Info

• During checkout or payment, the customer enters their credit/debit card details.

2. Adyen Encrypts and Processes the Payment

• Adyen securely processes the payment and, if tokenization is requested, generates a unique token (also called a recurringDetailReference).

3. Token is Returned to You

• Instead of receiving the raw card number, your system stores the token.

• This token can be safely stored in your database—it’s meaningless outside of Adyen’s system.

4. Future Transactions

• When the customer returns (e.g., for recurring billing, or one-click checkout), you use the token to initiate a transaction without re-entering card details.

• Adyen maps the token back to the actual card information and processes the payment.


Key Benefits

PCI Compliance: Reduces your PCI DSS scope since you’re not storing card data.

Security: Card details are encrypted and stored securely by Adyen.

User Experience: Enables features like stored payment methods, subscriptions, and auto-renewals.

Network Tokenization Support: Adyen also supports network tokens (from Visa, Mastercard, etc.) which offer additional security and lifecycle management.


Types of Tokenization in Adyen


Token Type Use Case Token Format

One-click tokens Stored for customer-initiated payments recurringDetailReference

Subscription tokens Used for scheduled recurring payments recurringDetailReference with contract type RECURRING

Network tokens Card-brand-issued tokens (if enabled) Managed by card networks with lifecycle support


Setup Notes

• Tokenization must be enabled in your Adyen account.

• You must set the storePaymentMethod flag to true when making a payment request.

• For recurring or subscription payments, set the shopperInteraction field to ContAuth and the recurringProcessingModel to Subscription or CardOnFile.


Example API Flow (Simplified)

Initial Payment Request:


{

"amount": { "currency": "USD", "value": 1000 },

"paymentMethod": { "type": "scheme", "encryptedCardNumber": "...", ... },

"storePaymentMethod": true,

"shopperInteraction": "Ecommerce",

"recurringProcessingModel": "CardOnFile"

}


Future Payment Using Token:


{

"amount": { "currency": "USD", "value": 1000 },

"paymentMethod": { "storedPaymentMethodId": "841599548723410C" },

"shopperInteraction": "ContAuth",

"recurringProcessingModel": "CardOnFile"

}


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