What is Tokenization and why you should use it

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By Suraj Bediya

In a world where online fraud and cyberattacks constantly create hurdles in the adoption of digital payments, therefore to prevent online and digital data breaches tokenization is introduced by RBI. However due to the novelty of process, many card users are unaware of how card tokenization will pan out and how payments partners and merchants will migrate all card payment flow to Tokenization. We will simplify the process and explain how it will pan out in digital payment industy.

What is Tokenization

Tokenization refers to a process by which a piece of sensitive data, such as a credit card number, is replaced by a surrogate value known as a token. The token is a randomized data string that has no essential or exploitable value or meaning.

The sensitive data still generally needs to be stored securely at one centralized location for subsequent reference and requires strong protections around it. It is a unique identifier which retains all the pertinent information about the data without compromising its security.

The security of a tokenization approach depends on the security of the sensitive values and the algorithm and process used to create the surrogate value and map it back to the original value.

Need for Tokenization

Tokenization is primarily used in the Payment Card Industry (PCI). Tokenization provides protection for credit card information, bank account information, social security numbers, and many more in the Payment Card Industry. Tokenization of data safeguards credit card numbers and bank account numbers in a virtual vault, so organizations can transmit data via wireless networks safely. The simplicity of using tokenization and it cost-efficiency compared to other data protection methods are its plus point to used in PCI as it meet compliance standards.

Benefits of having tokenization

It has many benefits to its use, including the level of difficulty attackers face when attempting to steal tokenized information. If the data is stolen, it cannot be reverted to back to its normal form, so it is useless to attackers. If the tokenization is done with a token vault, it is still extremely difficult for hackers to steal the information. The data in the token vault still tends to be encrypted as well, just as a secondary precaution.

Tokenization offers an additional layer of security for eCommerce websites, increasing consumer trust as it Enhanced customer assurance.

Tokenization solutions provide a way to protect cardholder data, such as magnetic swipe data, primary account number, and cardholder information. Companies can comply with industry standards more easily, and better protect client information.

Tokenization also uses less resources than encryption does, and has less of a chance of failure, compared to other data masking methods.

How do I tokenise my card with online Merchant

• You should follow the instructions specified by the online Merchant and follow the registration and verification flow in order to register for tokenisation and store the token with the online Merchant.
• Generally, the process would entail filing your card details, followed by verification via OTP and then a token will be generated associated with your card. This token will be saved by the online Merchant.

You can delete token by directly going to the merchant’s website/app and deleting the card associated with the token from your payment preferences. Alternatively, you can also call bank helpline to request for deletion.