Tokenization Definition.
Replacing sensitive data, above all the PAN, with a token that is worthless if stolen, while the mapping is kept in a secure vault. It comes in two forms with different life cycles: PSP proprietary tokens and scheme network tokens. Benefits: a drastic reduction in PCI DSS scope, data breaches rendered harmless, and stored credentials that keep working.
See also
Where this term appears
GuideThe four-party modelGuideThe role of banksGuideMerchant, acquirer, PSPGuidePayment schemesGuidePayments in the Netherlands and BelgiumGuidePayments in Central and Eastern EuropeGuideWhen no authorization is required: exclusions from the scope of payment servicesGuidePayments in FranceGuidePayments in Hungary, Czechia, and SlovakiaGuidePayments in PolandGuidePayments in Russia and the CISGuidePayments in Sweden