What is Tokenization?
A piece of randomly generated data that serves as a placeholder for a more valuable piece of data is known as a token. Tokenization is when sensitive information, in this case credit card numbers, is replaced by tokens for security purposes.
Example:
Discover Card:
6011 000 4321 1234
Tokenized Discover Card:
AEGP014CLO9021
Is Tokenization Safe?
The risk of a data breach is significantly lowered when utilizing tokenization, as only tokens are stored, and not the sensitive data. For this reason, it is a (PCI) compliant way to store card information.
When is Tokenization Used?
Credit cards are tokenized in order to keep a card on file for payments with subscription billing or recurring billing. The tokens can then be securely passed through the internet or wireless network as needed when processing a specific payment. In addition to online orders, tokens are also used to secure card information in mobile wallets such as Apple Pay or Google Pay.
