Paying with a phone at an American checkout does not send the card number to the merchant. A different value travels instead, and the substitution is the point of the system.
The card number is a permanent identifier
A traditional card carries a primary account number that stays constant for years. Anywhere it is used, that same number is transmitted and often stored.
That permanence is what makes stolen card data valuable. A number captured once can be used repeatedly until the issuer cancels and reissues the card.
Every merchant that stores it becomes a potential source of exposure, which is why breaches at retailers and processors have such long tails.
Tokenization substitutes a different value
When a card is added to a wallet, the network issues a device-specific token that stands in for the account number on that phone or watch.
The merchant receives the token and a one-time cryptogram, not the underlying card. Only the network and the issuer can map the token back to the real account.
A token stolen from a merchant is far less useful, because it is bound to a particular device and cannot simply be typed into another checkout page.
The device adds a second factor
Wallet transactions are authorized by whatever unlocks the device, typically a fingerprint, a face scan or a passcode held on the phone itself.
That biometric never leaves the device. What travels is confirmation that the authentication succeeded, which is why losing the phone does not hand over the credential.
The combination matters more than either half. A token without the device authorization does not complete a payment, and the device without the token has nothing to send.
Losing the phone is a different problem
Because tokens are device-bound, a wallet can be disabled remotely without cancelling the underlying card. The plastic in a drawer keeps working.
That separation is the practical benefit for consumers. A compromised device does not force a card reissue and the account number changes that come with it.
The reverse also holds. Replacing a lost card usually updates the token automatically, so a wallet keeps functioning without the card being re-entered everywhere.
Why acceptance took so long
Tokenization requires terminals, processors, networks and issuers to all handle the new format. The chain is only as capable as its weakest participant.
The contactless terminal upgrade that spread through US retail did much of the groundwork, since the same hardware handles tapped cards and wallets.
Online acceptance followed a slower path, because browsers and checkout pages had to adopt the same standards that physical terminals already supported.