Tokenization vs. Encryption - Is It The Same?

When it comes to securing sensitive data, it's no secret that the process of data obfuscation can be your best asset. The top software options in the digital marketplace right now are tokenization and encryption, as these both work to conceal electronic information in a way that'll preserve what it says without putting anything at risk.

First and foremost, these two options are not the same, so issues may arise when trying to decide which will be better for your needs. While both meet the regulation requirements (often for the HIPAA-HITECH, PCI DSS, GLBA, ITAR, and EU GDPR), you'll need to do your research to define the right one for you. With this in mind, here's a quick breakdown of tokenization and encryption just for you.

Tokenization

When you need to disguise specific data (like an account number, for example), tokenization can be a useful piece of software that'll take care of everything. It works to change your information from numbers into a randomized set of characters or symbols, creating a 'token' representation that can't be deciphered in any way. The information linking the token to the original data is stored in a 'vault', on a tokenization platform, and this is typically encrypted to ensure its security.

Encryption

The software used for encryption is far more advanced. The data is taken and converted into encoded information called ciphertext. Once the process is complete (usually via algorithms and a key is provided), this becomes entirely unreadable, by neither human nor computer. For it to become legible again, the information will need to be decrypted. Encryption tools are widely used and there are hundreds of thousands of apps, platforms, and more that provide assistance in the digital portal, so it's incredibly easy to secure your data for virtually any requirements.

The benefits of both tokenization and encryption

Tokenization in short:

• A random-generated token value is given for plain text (everything else is stored in a database)
• Tokenization is generally a worthwhile selection for structured data fields, including payment cards, account numbers, and Social Security numbers
• It's a stable format, with a continuing strength of security
• A trusted service; original data never leaves the vault, ensuring compliance requirements and customer satisfaction

Encryption in short:

• Uses mathematics and algorithms to convert plain text into cipher text
• Can be scaled to meet the needs of larger data volumes
• Can function for both structured data and unstructured data
• A great choice for exchanging sensitive data with third parties who have the encryption key

Tokenization vs Encryption

As you can see, when you understand the two, these types of software are quite different. One of the biggest characteristics separating them doesn't lie in their very distinct processes - it actually relates to their capabilities for securing sensitive data. A token essentially has no relationship to the original information, whereas encryption gives the user a key that does. What this means for you is that tokenization can be far safer, as a person's ability to (either physically or digitally) access your data, is almost impossible. With encryption however, keys can be decrypted, although the process can be difficult.