What is tokenization?

A lot of resources are spent every year in order to keep credit card details a secret.

We do this, because anyone who has these card details can use them to make any purchase at any merchant for any amount (up to the credit limit at least).

But what if we make it so that those card details cannot be used more than once? Or at only one merchant? That's where tokenization comes in.

A payment token is like a credit card number that is restricted in use. This means that if the token gets stolen and someone tries to use it before it is cancelled, the impact of the fraud is reduced.