TSP (Token Service Provider)

A Token Service Provider (TSP) is a key entity in the payments ecosystem, primarily involved in enhancing the security of digital transactions through the process of tokenization. Tokenization involves substituting a customer's primary account number (PAN)—typically a credit or debit card number—with a unique digital identifier known as a "token." These tokens are used to facilitate transactions without exposing actual bank details, thereby significantly reducing the risk of sensitive information being compromised.

The responsibilities of a TSP include:

TSPs operate as part of a broader network that includes card networks, banks, and payment processors, collaborating to ensure that tokenization is seamlessly integrated into the payment processing chain. By managing tokens, TSPs help maintain the integrity and security of digital payments, making it safer for consumers to conduct transactions online and via mobile devices. This role is increasingly important as the adoption of digital payments continues to grow worldwide.