Tokenization

To put it as simply as possible, tokenization relates to swapping out one piece of information for something else, mainly due to the security advantages that this strategy fosters.

Cybersecurity breaches have become increasingly common, as hackers will stop at nothing to outwit security installations. Though tokenization, however, these attempts can be foiled because the data they're after has been replaced with unique identification symbols that serve as substitutes for the real thing. As noted by NerdWallet, the principle is similar to what tokens serve in an arcade or casino, as proxies for actual money. This way, should sensitive information fall into the wrong hands, the data can't be used because its "value" is exclusive to the arena in which it operates. This is one of the reasons why integrated payments systems are effective because tokenization is traditionally utilized to strengthen security measures.