>>What is Tokenization?

What is Tokenization?

Tokenization is a buzzword used in computer science. It is essentially the act of replacing sensitive data or information with unique phrases, keywords, symbols and words without compromising its security. This process seeks to reduce the amount of data individuals and companies need on hand. It has become a great way for big and small business alike to enhance the security of e-commerce transactions and credit cards. It also plays a key role in minimizing the complexity and cost of compliance with government regulations and industry standards.

How Tokenization Works

Tokenization is generally dependent on heuristics to separate tokens through the following steps:

  • Words or tokens are separated by line breaks, punctuation marks and white space
  • Punctuation marks or white space are or are not included based on the need
  • All characters within a sequence of strings are part of the token. It should be noted that tokens can include all numeric characters, alphanumeric characters and alpha characters.

Tokens can also act as separators. In most programming languages, for instance, arithmetic operators and identifiers can be placed together without white spaces. Though it seems that this would look like a token or single word, the sentence structure of the language typically considers a token (mathematical operator) as a separator. Therefore, even if several tokens are combined together, they can still be separated by a mathematical operator.

Payment Card Industry (PCI) standards don’t allow credit card numbers to be kept on a merchant’s point of sale database or terminal after a transaction. In order for one to be PCI compliant, retailers are required to outsource their payment processing to another company that offers a tokenization option. If that idea does not sit well with them, they will be required to install encryption systems. The company that provides tokenization options is mandated with the task of issuing the token value to their clients. They are also responsible for ensuring that the cardholder’s data is protected.

Because the token itself is not the main account number, it cannot be used outside the setting of a particular unique transaction within that specific retailer/merchant. For example, in a credit card transaction, the token normally contains only the last four digits of the card number. The remaining token is made up of alphanumeric characters. These characters represent the data and information of the cardholder.

What are the Advantages of Tokenization?

If your business handle credit card data, it is very essential to take advantage of tokenization. This process calls for a lot of work in order to implement. It wouldn’t make sense to not maximize the benefits that comes from it.

The first reason that you need to make use of this technology is the fact that it makes it almost impossible for hackers to gain access to your credit card information. The conventional system used to keep credit card data in databases where they were exchanged easily across networks. In essence, tokenization can be used with sensitive information of all types such as criminal records, loan applications, voter registration, bank transactions, driver information, and so forth.

Another major benefit of tokenization is that it lets you locate all your essential data. Most IT specialists use automated tools like sensitive number finder to track down PAN data. However, you need to know where to locate the data in order for this approach to work.

Tokenization also forces the company to reassess which people can have access to PAN data. This technology limits access to essential data in an organization. Not all employees can be trusted with some types of information.

If you have not implemented tokenization, it is time to consider it. It usually works in retailer’s favor. ImGlobal’s payment gateway utilizes tokenization and is PCI Compliant for secure transactions.

2016-12-27T20:38:50+01:00June 15th, 2015|Categories: Insights - Tips & Resources|Tags: , , , |