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I have a general doubt on using encryption nature. Suppose I use shield to encrypt data and send some data as merge fields in an email template to other system, how is the encrypted data transferred / how does it appear to the receiver - in encrypted format or in original format? Say I encrypt name field of a custom object and use this in email template, name on record is John and if I choose * as masking character, in Salesforce it will be displayed as ****. When email is sent to other system, will the receiver see it as **** are plain text?

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This is a very good question and this is one of the reasons we have given up on trying to support masking.

You can find more reasons here: Encrypted data not in the encrypted format

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