A More Secure, Scope-Reducing Solution: What is Tokenization?
Learn about tokenization, how it works, and why it is a superior solution to other data-security methods and technologies.
The purpose of tokenization is to swap out sensitive data—typically payment card or bank account numbers—with a randomized number in the same format but with no intrinsic value of its own. This differs from encryption, where a number is mathematically changed, but its original pattern is still stored within the new code—known as format-preserving encryption. Tokenization is the process of removing sensitive data from your business systems by replacing it with an undecipherable token and storing the original data in a secure cloud data vault. Encrypted numbers can be decrypted with the appropriate key. Tokens, however, cannot be reversed, because there is no mathematical relationship between the token and its original number.
Detokenization is the reverse process, exchanging the token for the original number. Detokenization can be done only by the original tokenization system. There is no other way to obtain the original number from just the token. Tokens can be single-use (a one-time debit card transaction) that are not retained or multi-use (a credit card number of a repeat customer) that are stored in a database for recurring transactions.
The goal of a tokenization platform is to remove any original sensitive payment or personal data from your business systems, replace each value with an undecipherable token, and store the original data in a secure cloud data vault separate from your data environment. For example, when you process a payment using the token stored in your systems, only the original tokenization system can swap the token with the corresponding PAN (primary account number) and send it to the payment processor for authorization. Your systems never record, transmit, or store the PAN—only the token.
A tokenization platform that incorporates off-site data vaulting prevents attacks from gaining any type of usable information—financial or personal. “Usable information” is the key here. Although tokenization cannot guarantee the prevention of a breach, it can desensitize data, rendering it useless to hackers. The advantage to tokenization and cloud data vaulting is there is no information to steal if a breach occurs. The risk of data theft is virtually eliminated.
For maximum security and compliance, tokenization allows you to outsource the handling and storage of sensitive data to a secure third party. Using the TokenEx platform, you can ensure your environment remains free of sensitive data to significantly reduce risk in the event of a breach.
The TokenEx platform is uniquely designed to accept and tokenize any sensitive data set, resulting in a comprehensive security and compliance solution that provides unparalleled flexibility for security professionals in insurance, e-commerce, healthcare, retail, and more.