When customers believe that their data is safe, they are much more likely to trust a business with their hard-earned money. For this reason alone, companies of all sizes are working nonstop to protect the sensitive payment details that shoppers provide during the purchase process. A technology known as network tokenization has stepped onto the funds transfer stage, singlehandedly streamlining and safeguarding payments at every touchpoint.
Cyber criminals are constantly on the prowl, endlessly searching for vulnerabilities in websites, gateways, and software. Once they are exploited, the bad actor can gain access to sensitive payment details that can lead to identity theft.
Network tokenization in payments is a type of technology that exchanges a customer’s card payment details for a network token. To make this happen, you add the card details to your ecommerce platform, sending them on to the card company. That entity then provides a secure and unique network token. When you process the customer’s transaction, you send the token along with a single-use key or cryptogram. Only then can the transaction be processed by the card issuer.
Network tokens are uniquely positioned to protect consumer data. This is because they are limited to only the merchant who requested them and possess limited usability. As a result of these safeguards, customers are shielded from identity theft while sellers like you are less likely to suffer from the effects of data breaches or fraud.
In the past, when customers’ credit cards expired or details changed, the result often was a payment declination. However, network tokenization now facilitates improved authorization rates because it continues to function even in these situations. Moreover, because network tokens are issued in partnership with the card networks, they inspire trust and are more likely to be approved.
Thanks to fewer payment declines and a smoother purchasing experience, the likelihood that a customer will complete their purchase is higher. This leads to boosted satisfaction rates for shoppers and increased revenue for you from the completed sales. Additionally, the metadata that is provided with your token from the issuer allows you to display a digital image of the customer’s card and brand type, providing an extra layer of proof of legitimacy that helps to inspire credibility and trust.
Enhanced security and streamlined purchasing appeals to customers, while merchants benefit from the cost savings that tokenization brings. This occurs because sellers receive richer transaction data that is kept more secure than in the past. In many cases, these factors mean that sellers can qualify for lower processing fees.
Tokenization is not the only innovation designed to protect data; another popular option is encryption. Understanding the benefits of tokenization vs. encryption is also important for businesses seeking to maximize the protection of their customer data.
In encryption, customer account details are converted into cybertext using an algorithm and an encryption key. Conversion back to plain text can only occur with a matching decryption key. By contrast, tokenization substitutes customer details with tokens that have no value and are useless to hackers.
In encryption, identical output is generated when the same data is encrypted with the same key. On the other hand, tokenization generates a unique token for each data instance. Moreover, the effectiveness of encryption lies in the security of the key, which is not the case with tokenization. Finally, the format of encrypted data frequently varies substantially from the original. That is not the case with tokenization.
Although there are still robust uses for encryption, network tokenization is rapidly becoming the most popular method for protecting the security of data. Its benefits are palpable, leading to a smoother and more streamlined checkout experience, better information protection, and associated boosted client satisfaction rates. If you have not already incorporated network tokenization into your checkout processes, talk to your merchant services provider today.