In the modern digital era, e-commerce plays a vital role in our daily lives.
With the increasing shift towards online transactions, it’s essential for businesses to implement secure and effective payment solutions. A technology that has gained prominence in this regard is tokenization, enabling secure online transactions and card-on-file payments. This article delves into network tokenization, card-on-file payments, and their benefits for e-commerce enterprises.
What is network tokenisation?
Network tokenization serves as a protective measure in payment processing by bolstering the security of sensitive cardholder data. This method entails substituting real payment card details, like the primary account number (PAN), with a distinct identifier known as a token. This token functions as a stand-in for the card information and is utilized in transactions in place of the authentic card details.
The network token data is shared across various major card schemes, such as Visa and Mastercard.
What are card-on-file payments?
Card-on-file payments, also known as gateway tokens, empower your customers to encrypt and store their payment details securely for future use. Whether you operate a subscription-based model, offer recurring billing, or facilitate frequent purchases, card on file (CoF) has the potential to revolutionize the way customers engage with your business. This feature, integrated into Eway’s payment solution, aims to enhance repeat sales, reduce cart abandonment rates, and elevate the overall customer experience while maintaining robust security measures.
Card-on-file transactions can be initiated either by customers themselves or by merchants. In the former scenario, customers securely save their card information on a website to streamline future transactions. On the other hand, businesses are granted authorization to process regular payments using the stored payment data. For instance, a monthly streaming service can automatically charge subscribers using their saved payment details.
Advantages of Eway’s combined network and gateway tokenisation
At Eway, we offer both network tokens and card-on-file (or gateway) tokens. The combination of these provides a seamless end-to-end payments experience.
This combination of both token types brings significant benefits to your business and your customers:
1. Enhanced security:
The primary advantage of network tokenization lies in its enhanced security features. By substituting sensitive payment card data with unique tokens, the risk of data breaches and financial losses is significantly reduced. Even if a malicious actor gains access to the tokens, they hold no value without the original card data, adding an additional layer of security. Furthermore, since the network token is directly associated with the merchant, it cannot be utilized for transactions with any other entity, further bolstering security measures.
Eway ensures the secure storage of sensitive card data in adherence to industry standards such as the Payment Card Industry Data Security Standard (PCI DSS). This not only alleviates the regulatory compliance burden for our clients but also serves to mitigate the risks associated with data breaches.
2. Improved customer experience:
Card-on-file functionality offers a seamless and convenient customer experience by eliminating the need for customers to repeatedly enter their payment details during transactions. This streamlined approach makes the checkout process faster and hassle-free, contributing to a positive customer experience. Customers also have the flexibility to update their card details easily, whether due to expiration or a desire to use a different payment method. This ease of use not only encourages repeat purchases but also fosters customer loyalty.
Lengthy checkout processes often lead to abandoned carts, a common challenge for businesses. By implementing card-on-file capabilities and storing payment methods for future use, businesses can simplify the checkout process, keeping customers engaged and ultimately increasing conversion rates.
3. Reduced failed transactions:
When a card expires or is reported lost or stolen, payer banks take the initiative to automatically update the new card details associated with the existing network token. This seamless process ensures that there is no interruption of service for any recurring or subsequent payments.
Furthermore, card schemes like Visa automatically update the details of new cards, allowing customers to process transactions smoothly even when their stored card has expired. Visa goes a step further by checking its database for any updated expiry dates on old cards and then tokenizing them with the latest expiry date.
The enhanced security provided by network tokens facilitates streamlined fraud monitoring at payer banks. This, in turn, leads to a higher approval rate for recurring payments, benefiting both businesses and customers alike.
4. Flexibility and adaptability:
Gateway tokens enable businesses to securely store multiple payment methods for customers, offering a convenient solution for handling various payment scenarios such as recurring payments, installment plans, and debt repayment. This functionality simplifies the payment process for both businesses and customers, enhancing efficiency and reducing manual intervention.
Moreover, gateway tokens seamlessly integrate with mobile wallets and digital payment platforms, expanding the options available to customers and accommodating their preferred payment methods. This versatility helps businesses cater to a broader audience and improve overall customer satisfaction by providing a seamless and convenient payment experience.
Tokenisation is a valuable asset in the ever-evolving world of online commerce, providing both businesses and their customers with peace of mind and a smoother payment experience. With Eway’s combination of network and gateway tokenisation, bringing safe, secure and simple online payments to life has never been easier.
