Tokenized payments not only facilitate frictionless payment experiences, but also secure transactions by removing risks connected to the misuse of card credentials. Google Pay users, for example, simply add a debit or credit card to their app, and Google Pay requests a token to represent the card from the issuing bank. The card is then given a unique identification number, which only the card network can match with the actual card data when the user makes a purchase. A simple process that enables many secure day-to-day payment activities. The success of digital wallets, in-app payments, and online checkouts is closely connected to tokenization, as it enables convenient and secure transactions. For consumers it makes the act of payment frictionless. However, this often causes a simultaneous loss of control. How can consumers keep track of their tokenized payment credentials? Here, issuers can add value by transparently giving consumers control over their token life cycle management.
Enable the full power of tokenized payment
From online shopping to Netflix and Amazon accounts, mobile payment apps or digital wallets – consumers are increasingly using tokenized payment for secure and user-friendly digital payment services. But how can issuers use tokenization to add value for customers and deliver greater power to end-users?
How does tokenization work?
Changes in payment behavior greatly impact customer expectations when it comes to paying. For issuers, securing payment credentials in order to prevent fraud and safeguard customers is crucial. Tokenization meets these demands by creating a seamless payment experience that doesn’t compromise on customers’ security. Tokenization is a cost-effective digital security technology that replaces sensitive data, such as an account number, with a unique digital identifier called a token. The token allows payments to be processed without exposing actual details, such as card data, that could potentially be compromised.1 This is highly effective at securing payment card information and reducing fraud, a concept that is only becoming more important to consumers. According to Visa, tokens can reduce fraud by 26% on average compared with traditional online card transactions where you enter your primary account number (PAN) online.2 This shows the value of tokenized payment and its increasing importance in the future.
Card-on-file (COF) network tokenization is particularly useful as it covers the entire transaction life cycle, enabling end-to-end security. G+D’s numbers confirm the rise in tokenized digital payments and indicate a growing impact based on the increasing number of consumers switching to digital payments. In fact, over 67% of millennials are now exclusively using digital payments. This highlights the need for end users to have greater control over their tokenized payments.
Empowering consumers with Token Cockpit
G+D’s Token Cockpit is an integrated token-management tool that gives customers total control of their payment cards across all digital channels. By gaining a full overview of where payment credentials are tokenized, they can easily enable and revoke tokenized cards, or see connected cards in Apple Pay or Google Pay. This transparency enhances customers’ trust in their issuing bank, which, in turn, increases brand loyalty and customer stickiness. Jukka Yliuntinen, Head of Digital Payment Solutions, G+D, says, “This empowers the end user to deploy the mobile phone as a remote controller of payment cards for all digital channels.” Token Cockpit puts the customer in the driving seat.
For issuing banks, this solution enhances customer service, while reducing customer support costs. The solution also increases customer stickiness, conversions, and, ultimately, revenue. According to Yliuntinen, banks eliminate the risks of costly security breaches, the customers feel confident in how their payments are in use, and the customer relationship is strengthened. And the right merchants receive payments at the checkout. This constitutes a win-win for everyone!
G+D helped one of the largest banks in the Southern Hemisphere transform their digital services by enabling seamless transactions across a number of networks, technologies, and device wallets. Token Cockpit was an important component of this transformation. The bank’s digital integration resulted in a 140% year-on-year increase in contactless payment transactions and a 400% increase in the volume of mobile payments. This allowed them to better meet their customers’ changing payment needs, and increase transparency for both card issuers and end users.
It has never been more important to cater to customers’ needs and provide a secure, seamless, and user-friendly payment experience across all channels. Beyond that, as new technologies and services, such as digital payments, proliferate, it is vital to stay ahead of customers’ concerns and ensure that they remain in the driver’s seat of what happens with their own payment data. Customer-centric innovations such as G+D’s Token Cockpit will ensure that tokenization remains a booming and important future technology.