Tokenization is the process of replacing sensitive data with non-sensitive data (known as a token), which can be later used to get access to the initial (tokenized) data. In the payments industry, it is used to safeguard a card number and other payment data by replacing it with a unique string of numbers. This string can be used later to implement recurring payments.

Together with Client-Side Encryption, tokenization enables merchants to securely pass their shoppers’ data to a payment service provider, like Adyen.