What is Tokenization?
Tokenization is a data security technique that replaces sensitive data elements with non-sensitive substitutes called tokens. Unlike encryption, tokens have no mathematical relationship to the original data and cannot be reversed without access to the tokenization system.
How Tokenization Works
- Sensitive data is submitted
- System generates a random token
- Mapping stored securely in token vault
- Token returned for use
- Original data retrievable only via vault
Tokenization vs. Encryption
| Tokenization | Encryption |
|---|---|
| Random substitution | Mathematical transformation |
| No key to manage | Requires key management |
| Format-preserving | May change format |
| Requires token vault | Key unlocks data |
| Not reversible without vault | Reversible with key |
Use Cases
Payment Processing
- Credit card numbers (PCI compliance)
- Bank account numbers
- Payment credentials
Healthcare
- Patient identifiers
- Medical record numbers
- Insurance information
Personal Data
- Social Security numbers
- Driver's license numbers
- Personally identifiable information
Token Types
Format-Preserving Maintains original data format. Example: 4532-xxxx-xxxx-1234 → 4532-7291-8374-1234
Non-Format-Preserving Different format from original. Example: SSN → a7f3b2c1-d4e5-6789
Benefits
- Reduces PCI DSS scope
- Minimizes data breach impact
- Enables secure data sharing
- Supports compliance requirements