On this edition of Payments Insider, we are bringing you a brief view on Tokenization. This RBI recommended method is creating buzz everywhere and we knew you’d have questions. <\/p>\n\n\n\n
A merchant would send the credit card number to a trusted partner, such as your payment gateway, via encryption. In turn, the payment gateway will provide you with a reference number that reflects that credit card in their system.
This is a random string associated with the payment card number you, the merchant, provided to the gateway.<\/p>\n\n\n\n
People usually confuse it with encryption. Let us see how they are different from one another <\/p>\n\n\n\n
Tokenization and encryption vary primarily in that the former employs a ‘token,’ whereas encryption uses a ‘secret key’ to protect data.<\/p>\n\n\n\n
The fact that data encryption is reversible is a major flaw. Data that has been encrypted is intended to be recovered to its original, decrypted state. The algorithm employed to safeguard the data determines the encryption’s reliability. A more advanced algorithm ensures more secure encryption that is more difficult to crack.<\/p>\n\n\n\n
Tokenization of data, unlike encryption, cannot be reversed. Instead of utilizing a breakable technique, this system replaces sensitive data with random data, making the tokens unbreakable. A token serves as a placeholder and has no inherent value. <\/p>\n\n\n\n
Now that we know it is different from encryption, let us take a deep dive into its function and the overall process. Download our Payments Insider report and learn all you need to know about tokenization.<\/p>\n\n\n\n