What does the term 'encryption' generally refer to in financial transactions?

The term 'encryption' in the context of financial transactions specifically refers to the process of converting data into a secure format that is not easily accessible to unauthorized individuals. This is crucial for protecting sensitive information such as credit card numbers, personal identifiers, and account details during transmission or storage.

By applying encryption, financial institutions can ensure that even if data is intercepted, it cannot be deciphered without the appropriate decryption key. This adds a critical layer of security necessary to maintain customer trust and comply with regulatory requirements regarding data protection.

In contrast, summarizing transaction data does not involve security measures but rather focuses on condensing information. Creating physical copies of documents pertains to document management rather than data security. Processing payments faster is related to transaction efficiency rather than the security of the data being transmitted.