The concept of tokenization has been a hot topic, especially among those involved in transactional networks. Due to the need for banks and credit card companies to safeguard sensitive information during transactions, tokenization has been a hot topic. The evolution of technology has made face-to-face transactions more difficult (PCI DSS Tokenization Guides, 2011). The development of technologies that target the specific components of transactions is part and parcel. Any organization that allows people and businesses to transact via the Internet has digital transaction networks. In the past digital transactional networks relied upon the use of sensitive information belonging to all parties. But tokenization, a technique that allows for the substitution of sensitive data in digital transactional networks, has become a viable strategy. It facilitates transactional use on digital platforms.
Tokenization refers to the act of replacing sensitive information with non-sensitive placeholders known as tokens. These tokens are generated randomly and converted into data that has the same structure but without an inherent value. When tokens are valid, they often expire after a predetermined session or may only be used for a single entry (Tian, Lu, & Adriaens, 2020). Tokenization, unlike other methods such as encryption that can be reversed or the encrypted documents decrypted in order to reveal the original information or documents, is permanent. This means the token cannot be used to read the material once it has been created. Since long has tokenization been used to protect sensitive data, or in financial transactions. Surrogate keys, which were used to decouple database-linked data from others, became popular in the 20th Century. Tokenization is superior to encryption in protecting highly-valued data. In a typical digital transactional networking application, parties must utilize chip readers to enter credit cards and swipe to finish paperwork (Tian, Lu, & Adriaens, 2020). These methods can lead to security breaches by exposing sensitive card data (e.g. bank or credit card information), which could be used to compromise people’s privacy. On the other side, tokenization dramatically reduces fraud and also lowers the risk and vulnerability associated with digital and online breaches such as hacking or unauthorized access to information.
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