What is Tokenization?

Understanding Tokenization

The process of replacing sensitive data with non-sensitive placeholders. Tokenization is a data protection technique that replaces sensitive information with non-sensitive substitutes called tokens while maintaining data format and usability. Unlike encryption the tokens have no mathematical relationship to the original data and cannot be reversed without access to a separately stored token mapping system. Tokenization is particularly valuable for protecting structured data like credit card numbers. Tokenization is addressed in standards like PCI DSS NIST guidance and various data protection frameworks. Organizations implement tokenization through specialized tokenization platforms token vaults secure token mapping systems and integration with applications processing sensitive data. For example a retail company might implement tokenization for payment card processing replacing actual credit card numbers with tokens in their systems so that even if breached the exposed tokens have no value to attackers while still allowing transaction processing through a secure token vault that maps tokens to actual card data when needed. Related terms Data protection Data security Encryption PCI DSS Token vault Format preserving tokenization Cardholder data Data minimization Secure data handling.