In today’s digital landscape, ecommerce has become an integral part of our lives. As more and more transactions move online, it’s crucial for businesses to adopt secure and efficient payment methods. One such technology that has gained traction in recent years is tokenisation, which facilitates secure online transactions and card-on-file payments. In this article, we’ll explore network tokenisation and card-on-file payments and their advantages for ecommerce businesses.
What is network tokenisation?
Network tokenisation is a security feature used in payment processing to enhance the security of sensitive cardholder data. It involves replacing actual payment card information, such as the primary account number (PAN), with a unique identifier called a token. This token acts as a surrogate for the card data and is used in transactions instead of the actual card details.
Network token data is shared with most major card schemes, including Visa and Mastercard.
What are card-on-file payments?
Card on file payments (otherwise known as gateway tokens) enable your customers to encrypt and save their payment information for future use. Whether you run a subscription-based service, offer recurring billing, or facilitate regular purchases, CoF has the potential to transform the way your customers interact with your business. It’s an added benefit of using Eway’s payment solution, and is designed to boost repeat sales, minimise cart abandonment, and improve the customer experience without compromising security.
Card-on-file transactions can be initiated by the cardholders themselves or by merchants. In the first instance, customers save their card details on a website to simplify future purchases. Alternatively, businesses are authorised to take regular payments using the stored payment information. An example of this would be a monthly streaming service.
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 tokenisation is the enhanced security it offers. Replacing sensitive payment card data with unique tokens significantly reduces the risk of data breaches and financial losses. Even if a hacker gains access to the tokens, they are useless without the original card data, adding an extra layer of protection. The network token is linked directly to the merchant, meaning that it can’t be used for any other business, further increasing that level of security.
Eway securely stores sensitive card data in compliance with industry standards like the Payment Card Industry Data Security Standard (PCI DSS) reducing the burden of regulatory compliance and mitigating data breach risks for our clients.
2. Improved customer experience:
Card-on-file translates to a seamless and convenient customer experience. Since customers no longer need to enter their payment details for every transaction, the checkout process becomes faster and hassle-free. Customers can easily update their card details if their card expires or if they want to use a different payment method. This ease of use encourages repeat purchases and boosts customer loyalty.
Lengthy checkout processes are a common reason for abandoned carts. By offering to store payment methods for future purchase, businesses can streamline the checkout process to keep customers engaged and increase conversion rates.
3. Reduced failed transactions:
Whenever a card expires or is reported lost or stolen, the payer banks automatically update the new card details against the existing network token to ensure there is no interruption of service for any recurring or subsequent payments.
As the card schemes automatically update details of the new card, your customers can process transactions as normal when the only card you have on file has expired. Visa will even check their database for any updated expiry dates on old cards and tokenise them with the latest expiry date.
The higher level of security that network tokens offer ensures streamlined fraud monitoring at the payer banks which ultimately results in a higher approval rate for recurring payments.
4. Flexibility and adaptability:
Gateway tokens allow businesses to securely store multiple payment methods for customers. For example, they provide a simple and efficient way to handle recurring payments, instalment plans, and debt repayment. Additionally, these payment methods can easily integrate with mobile wallets and digital payment platforms, catering to a wider range of customers and their preferred payment methods.
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.
You can rely on our dedicated support and industry expertise to guide your business through the implementation process and maximise the benefits of streamlined payments.
Want to know more? Talk to our team of experts today.
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