What is Tokenization of data?

Tokenization means encrypting the actual data, credit card information for example, into a nonsense combination of numbers and letters so that hackers cannot read and take advantage of the data. 

Tokenization is widely used among all of the payment methods, online and offline, recurring payments, where the client has to provide its personal data, card number, expiration date and CVC in order to make a purchase.

The primary purpose of the tokenization is to hide the sensitive information when sending it to the bank for authorization of the transaction. Also it is used to store the data of a credit card on a secure PCI DSS server and then use it automatically each time a client uses his card in a virtual payment gateway to make a recurring payment.