What is Tokenization and How Does it Work?

The purchase and payment of products and services online, is becoming more and more common and it will continue to increase. But where money goes, the criminals follow. For this reason, to reduce the possibility of fraud, chips are incorporated into credit and debit cards, making it more difficult for criminals to duplicate card data in payment points (POS, Points of Sale); and tokenization is used to protect credit card credentials when used for digital payments.

Basically, tokenization is a method that converts the number of a card (PAN, Primary Account Number), into a code generated using random characters (token), to protect the payment credentials of a customer. This prevents hackers from stealing and using the information to commit fraud.


Tokens protect the account number and credit card number in a virtual vault that can be transmitted without additional unnecessary risks. In order to operate, there has to exist a payment gateway that stores sensitive data, so that tokens can be generated.

To that effect, payment gateways that perform tokenization, such as Kushki, must also hold a [PCI DSS Level 1](https://kushki.cl/blog/certificacion-pci-pagos-mas-seguros-para-tus-clientes-y-tu-negocio/) certification: The highest level of compliance with the requirements established by the Payment Card Industry Data Security Standard (PCI DSS). This ensures that companies that process, store or transmit credit card data, maintain information in a secure environment.

Advantages of Tokenization --------------------------

• Tokenization eliminates or minimizes the risk of fraud and theft of the customer's private information when paying with a credit card.
• Tokens do not hold sensitive data, and cannot be used by any entity other than the one that stored bank credentials; so, even if tokens were stolen, they would be useless for a criminal.
• They preserve businesses service quality and their reputation, as they can offer security to customers when they pay.
• Tokens save capital and effort for businesses because they don't have to implement information controls or protection for tokens, because they do not hold sensitive data.
• Tokens increase trust among the general public when buying items online.

If you run an e-store or are considering receiving payments online, we suggest you to seek a platform that provides your business with the necessary protection. For this, select those options that include tokenization and that possess the PCI DSS Level 1 certification.

At Kushki, we maintain the highest security standards so that you can provide the best experience to your customers.