The COVID-19 pandemic has completely changed the world as we know it. More things are being done online, which leads to a growing number of online payments. People are paying for a variety of things online, from groceries and clothes to educational courses and access to digital platforms.
However, this also implies that we as Internet users are sharing our sensitive data each time we purchase online.
How are all these businesses and websites protecting our private data each time we use our credit cards online?
Many believe that payment tokenization is one of the most efficient ways to improve security and trust. But, what is tokenization? How can such a complex, emerging technology make us feel safer when buying anything online?
In this article, we bring you all the answers about payment tokenization.
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SEE ALSO: A Balanced Realistic Explainer on Tokenization
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Tokenization & Payment Tokenization
So, what is tokenization?
Simply put, tokenization turns data or an asset into something that is equivalent to them. The concept of tokenization first appeared in 2001 as a way to secure sensitive transactional data. This system, which was developed by TrustCommerce, replaced the primary account number (PAN) with a random number or token. This led to merchants no longer storing credit card information, which improved security tremendously because there is nothing for hackers to attack and steal.
Payment tokenization refers to the process of replacing sensitive, private data like credit card number, account number, and address with randomly generated numbers representing a token. Each token consists of anywhere from thirteen and nineteen alphanumeric characters, and none of these numbers include the PAN or any detail revealing the user’s identity.
Tokens protect…
