Plastic Token Verification Purpose

At Video Games parlor or many other outlets I see people dispensing Plastic token.

These token can be inserted into a machine which does a specific functionality. How are the plastic token verified.

What sensor can do that? How do we build such a system? Can there be a paper token system also?

probably RFID

You could do paper tokens using QR codes as a serial number system, with the actual data on the computer.