The Clearing House has reported an uptake of its Token Service, a system designed to protect account data by replacing sensitive info with secure digital tokens. The service aims to reduce fraud and data breaches across the financial sector as more institutions integrate tokenisation into their payment and data-sharing frameworks. The Token Service operates within both the EPN® network for ACH payments and the RTP® network for real-time transactions.
By replacing actual account numbers with tokens, banks and their customers can limit the exposure of sensitive details when interacting with merchants, fintechs, or other third parties. Tokens remain encrypted throughout the payment process and can be managed or replaced without altering the original account.
Supporting Open Banking
The adoption of tokenisation is expanding alongside the growth of Open Banking, where financial data is shared with authorised third parties. In previous years, ‘screen scraping’ practices had left account data vulnerable. The move toward API-based data sharing, coupled with customer permission controls, provides a more secure environment for financial connectivity and helps customers better manage data access permissions.
According to representatives from PNC, the expanded use of The Clearing House Token Service enables consumers to exercise more control over their financial data, supporting both safety and trust in digital banking environments. Officials from US Bank also noted that integrating tokenisation at the network level enhances fraud prevention while improving how financial data is shared and managed.
Banks are now integrating directly with The Clearing House for token issuance and collaborating with third parties to distribute tokens for additional use cases. These include securing ‘account-on-file’ details held by merchants and billers, where large-scale data storage poses heightened breach risks. Representatives from The Clearing House said the service allows banks to embed security at the payment network level, providing flexibility and a stronger foundation for future innovation in payments and data protection.
