What does "tokenization" mean in the context of PCI DSS?

Tokenization refers to the process of replacing sensitive cardholder data with a non-sensitive equivalent, known as a token. This token retains the essential information about the original data without compromising its security. The token itself has no meaningful value outside the specific context in which it is used. Therefore, in the context of PCI DSS, tokenization is a method to enhance data security by limiting the exposure of actual cardholder information during transactions and storage.

Using a token instead of the actual credit card number mitigates the risks associated with data breaches, as the tokens cannot be used outside their intended purpose and do not allow for the unauthorized retrieval of the original cardholder data. This aligns with PCI DSS goals, which are focused on protecting sensitive payment information.

The focus on replacing cardholder data specifically highlights the control and security measures required under PCI DSS standards, allowing organizations to reduce their scope of compliance while maintaining operational functionality.