We will be covering the following topics in this Blog.
What is tokenization?
Why is it needed?
How is it different from encryption?
Who can benefit from this?
How do we help our customers in this area?
Challenges & solutions
1. What is tokenization?
Tokenization is a process of converting sensitive data like a credit card number into non-sensitive data known as a token. The token is an integer or word that is generated arbitrarily with no intent. It uniquely identifies the original data without compromising its security.
2. Why is it needed?
The main reason for using tokenization is security. Let’s take an example to understand this better. Suppose you have to buy something online on a monthly basis like a Netflix account or any other product/service. The online service provider would require your credit card details to complete the transaction every month. If they save your credit card details there is a chance that it might be hacked and your credit card details could fall into the wrong hands. To avoid this from happening the credit card details are converted into tokens and only the tokens are saved with the service provider which can be used to complete the transactions every month. The credit card details are saved in a different place like a payment gateway which is more secure and safe.
3. How is it different from encryption?
In a system that has tokens the original data is converted into tokens and they are linked together. If someone acquires the token, there is no way to recover the original data because the token is created using a random string rather than a formula or procedure.
In a system that has encryption the original data is converted into encrypted data using a formula/method. If someone gets hold of the encrypted data there could be a way to get back the original data as there is a formula/method used.
4. Who can benefit from this?
Financial service providers like credit card companies or banks.
Healthcare companies are also required to protect sensitive data.
5. How do we help our customers in this area?
We thoroughly study the customers' challenges and suggest the best solution that can fit into their budget, and timelines and smoothly integrate with their systems. We have implemented tokenization using Thales for one of the leading Banks in the Middle East.
6. Challenges & Solutions
Usually, banks face challenges with traditional payment systems like heavy resources and infrastructure, they are less secure and take more time. Tokenization resolves these issues and makes the payments secure and quick with low to minimal resources and infrastructure requirements.
It can be implemented in 2 ways - vaultless and vaulted tokenization.
In vaulted tokenization, the mapping between the original data and the token is stored in a vault. In vaultless tokenization, the token is created at runtime using an algorithm.