Tokenization Security: What you need to know

On this page, we’ll take a look at tokenization security, one of the many cryptographic security methods that we use at First Atlantic Commerce; from the most basic tenets of its function, to how tokenization security is utilised in the financial services industry.

What is tokenization?

At its most basic level, tokenization involves the exchanging of a specific value for a ‘token’. Much like the exchange of money for chips at a casino (where the chips have no value outside of the casino), tokenization is the process of replacing sensitive data with unique identification symbols that have no value outside of the data facility/vault or third party provider that administers the tokenization program. The token retains all essential information on the data without compromising its security.

The essential thing to remember with tokenization is that the original information is still held or represented by the token, but it’s expressed in a manner that is useless to anyone but the end user. A shop wouldn’t accept a casino chip as legal tender; a business won’t accept a tokenized credit card number.

What is tokenization security?

Tokenization security is the method of taking a piece of very important data, and turning it into another form that is of no use to those who would illegally or maliciously appropriate it. The two most important points with tokenization security are that:

  1. The token value must be completely useless to an attacker, whether by itself or as part of a series of captured token values
  2. Authorised parties must be able to easily utilise the tokenization process, in terms of both tokenizing and de-tokenizing a given value, or group of values

Tokenization security sees heavy use in credit card processing, where it is an effective means to transport sensitive codes securely. Specifically, in the case of businesses such as ours, tokenization is primarily used for the secure transportation of Primary Account Numbers, or PANs; the large identifying numbers found on all payment cards. These are tokenized into a seemingly random collection of numbers and letters, which can then be de-tokenized by authorised parties, when necessary. In this way, customer PANs can be exchanged in secure financial transactions, safe in the knowledge that they are incredibly difficult to intercept.


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