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Why is Tokenization Important?


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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 Payment Card Industry (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.

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