TOKENIZATION AND ENCRYPTION IN DIGITAL PAYMENT SECURITY: KEY MECHANISMS FOR DATA PROTECTION

Abstract

Electronic payment services are seen nowadays as a growing necessity of conducting financial operations in today’s world. Nevertheless, advances in the usage of mobile and digital technologies have brought new kinds of security threats, and it has never been more important to safeguard the data. Of all the available security methods applied for payment data protection, tokenization and encryption are two primary methods for protection of the payment data from unauthorized access due to privacy. Analyzing the safety of electronic payment solutions this paper discusses the use of tokenization of payments as well as encryption. A few studies also indicate that through tokenization clients’ risk of compromise reduces by up to 70% while through encryption particularly AES-256 break-ins have been minimized to as low as 15%. These technologies together reduce the occurrences of fraud and increase the levels of regulatory compliance hence cutting the number of security incidents by 30%. However, Whentran exposes difficulties that need to be solved in high traffic times like scalability in transactions and key management for refining the applications of these security measures. It also shows how diverse risks have paved the way for constant enhancement of encryption and tokenization for safe payment solutions.