Online and in-store merchants that offer credit card payment options to customers are both concerned about protecting their data. Hackers can compromise credit card information of many companies in today’s digital world. Tokenization and encryption are two ways to protect credit card information.
This article will discuss the meaning of each of the data security options, as well as the roles they play and the differences between them. We’ll also talk about how business owners can make sure their system has both. Let’s begin by defining each one.
Encryption Definition
Credit card encryption is the conversion of the sensitive information required for credit card transactions into an encoded form that is only decipherable by the payment processor using the corresponding decryption key.
Credit card processing automatically encrypts customer payment information when a transaction is initiated. The encryption key is then sent to the recipient or financial institution to decrypt it.
Although encryption offers a significant layer of protection against unauthorized viewing, it does not prevent the possibility of interception of encrypted messages. Hackers have developed sophisticated programs to gain access to encryption keys and the associated data that they can decipher.
Tokenization Defined
Tokenization replaces sensitive credit card data by a unique identifier or token. Hackers cannot use tokens to make fraudulent transactions. Tokens are ineffective. Without the decryption key that comes with tokens, they are useless. This key is only known to authorized parties.
Credit card tokenization refers to the process of replacing a customer’s sensitive card number with a unique identifier, or “token”. The token can be used to replace the credit card number in future transactions. This adds an additional layer of security. Tokenization reduces PCI compliance and helps to protect identity theft and data breaches. Tokenization is available for both online and in-store transactions.
There are two types of tokens available: multi-use and single use. A single-use token can only be used once and is generated for each transaction. Multi-use tokens are reusable for multiple transactions but have a shorter life span than single-use tokens.
To further protect sensitive data, tokenization can be used with encryption. Data encrypted is converted into a ciphertext which can only be decrypted using the correct key. Tokenization is used to replace the primary account numbers (PANs) with tokens, and encryption can be used for the PAN to be encrypted.
What Roles does Tokenization and encryption play in credit card processing?
Both tokenization and encryption are important steps in protecting credit card data. Tokenization is the process by which sensitive data is replaced with a unique identifier. Encryption transforms readable data into an inaccessible format. To protect credit card data, both encryption and tokenization can be used. Tokenization and encryption are two distinct processes that serve different purposes. Tokenization is used to protect data once it is in transit. Encryption protects data while it is still being processed.
What’s the Difference between Encryption and Tokenization?
Tokenization is different from encryption in that encrypted data can be decrypted while tokenized data cannot. Tokenization is a safer option because it renders the data inaccessible to criminals, even if they have the token.
Tokenization is more secure than encryption data. Encryption protects data in transit while tokenization protects it after it has been decrypted. Tokenization replaces sensitive credit card information with a unique identifier, making it more secure than encryption. Hackers will find it harder to steal credit card information by tokenizing. They would have to be able to identify the token to purchase. Tokenization is more efficient than encryption because it doesn’t require any data to be decrypted.
Tokenization and encryption are important components of credit card processing and data security. Tokenization replaces the PAN with a randomly generated string of characters to protect sensitive data. Encryption protects data from being accessed by unauthorized individuals. These two technologies combine to provide high security for credit card transactions.
How to Make Sure Your System Uses Encryption and Tokenization
To protect your customers’ credit cards information, it is essential to make sure that your credit card processing system uses both encryption and tokenization. Check the security features to verify that tokenization and encryption are used.
You can consult your existing credit card processing provider to determine if you have the latest technology that uses both encryption and tokenization.
You might be interested in finding a company offering both. Balanced Payment System is the most trusted payment processing company. They can help you determine what your current situation is and recommend the best solution for you to make sure your data is double secured using encryption and tokenization.
Please contact us at (800) 354-6256 or via email at [email protected].