What Is Tokenization (And Why You Need It)

What Is Tokenization? With regard to data security, tokenization refers to the process of securing sensitive data by substituting valuable elements with non valuable equivalents known as tokens. Tokens serve merely as a reference to the original item or currency and provide value only within an authorized, isolated ecosystem that validates its purpose.

The constant threat of cyber attacks and fraud has made both personal and financial data extremely susceptible to exploitation. Thankfully, tokenization converts sensitive data to digital tokens that have little or no value outside a specific digital ecosystem.

Once all elements have been tokenized, there’s no distinguishable relationship between the original information and its tokenized results which provides excellent security to data that’s stored or “at rest.”

Integrating tokenization into credit card processing provides substantial protection to consumers and businesses alike, by yielding only unusable tokens to hackers. This forces fraudsters to go elsewhere to seek valuable digital assets like credit card numbers and social security numbers.