tokenization
Tokenization is the process of replacing sensitive data with unique identifier numbers that retain all essential information about the data without compromising its security. Tokenization is dedicated to helping businesses minimize the amount of data that needs
to be retained and has become a very popular way for small and medium-sized businesses to enhance the security of their credit card and e-commerce transactions, while complying with industry standards and government regulations and working to
minimize cost and complexity to a minimum.
Examples of Tokenization
In theory, tokenization technology can be used for a variety of sensitive data, including bank transactions, medical records, criminal records, car driver information, loan applications, stock transactions, and voter registration.
Tokenization is commonly used to protect credit card data, bank account information, and other sensitive data processed by payment processors.
Payment processing use cases that enable tokenization of sensitive credit card information include:
- E-commerce websites; and
- Businesses that archive customer information.
Benefits of Tokenization
- It is more compatible with the system than encryption.
- It is a less resource intensive process compared to encryption.
- The risk of data leakage is reduced.
- It drives new technologies such as mobile wallets, one-click payments and cryptocurrencies, making the payments industry more accessible.
- It reduces the number of steps involved in complying with PCI DSS regulations for merchants.