FIPS 140-2 Level 3 is a U.S. government benchmark for cryptographic modules that require physical tamper evidence and identity-based authentication for critical security parameters. Level 3 HSMs detect physical attacks and zeroize keys rather than export them, baseline expectations for payment-grade key storage.
Federal and regulated-industry RFPs often mandate FIPS 140-2 validation (Level 3 or higher) for systems touching sensitive financial data. Cloud HSM services publish FIPS certificates for their underlying modules; SaaS vendors cite those when they do not operate bare metal themselves.
FIPS validation is about the module, not the entire SaaS application. Ask which operations run inside validated boundaries versus general compute. Tokenization touchpoints (PAN encryption, cryptogram derivation, key wrap) should map to validated modules in architecture diagrams.
Veliro relies on FIPS 140-2 Level 3 (or successor FIPS 140-3 where applicable) modules for vault and key operations underpinning token custody. This supports enterprise security questionnaires without merchants operating their own HSM farms.
When RFPs ask for “FIPS compliant application,” clarify whether they need module certificates for cryptography or broader FedRAMP-style controls; the answers drive different vendor shortlists.