What is one key responsibility of a Token Service Provider?

A Token Service Provider (TSP) plays a pivotal role in securing sensitive payment data by generating and issuing tokens that substitute for actual payment card information. These tokens allow businesses to process payments without exposing the underlying card details, thereby reducing the risk of data breaches and ensuring compliance with security standards such as PCI DSS.

The primary function of generating and issuing EMV payment tokens is to facilitate secure transactions. EMV tokens represent a unique identifier linked to a specific transaction, preventing the theft of actual payment information, since the tokens are meaningless if intercepted. This makes option C the clear choice, as it highlights the essential task that aligns with the overall goal of protecting cardholder data.

In contrast, managing physical security pertains to protecting the infrastructure where data is stored, which is not the primary function of a Token Service Provider. Similarly, generating and distributing hardware tokens is a different domain focused on two-factor authentication or access control rather than payment data protection. Monitoring transaction logs for anomalies relates to fraud prevention and security oversight but does not capture the core responsibility of a TSP. Thus, generating and issuing EMV payment tokens aptly encapsulates the TSP's key responsibility in facilitating secure payment transactions.