How Network Tokenization Empowers Financial Services


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Network tokens are a robust solution that allows businesses to achieve payment security. It offers a streamlined, frictionless payment flow, ensuring a seamless customer checkout process.

It simplifies the account verification processes, eliminating the need to store sensitive financial account information. Here are a few attributes of network tokenization that empowers financial services.

Maximize Repeat Business

Debit and credit cards have long shelf lives, however, these cards eventually expire within two to five years or are lost, stolen, or damaged. When customers receive new cards, there might be a high chance that customers may wish to keep their cardholder details private from merchants. Hence, merchants must request updated card data from their customers to address this issue. Network tokenization provides a solution to the issue of expired or cancelled cards since these tokens are automatically updated in real time, ensuring the customers’ cardholder data is always up to date. This helps minimize involuntary churn and increase a business’ revenue potential when digital payments are accurate and processed in a streamlined schedule. Merchants can apply rules when, where, and how these tokens need to be implemented. Therefore, if one token is compromised for one business, it will not negatively impact how other merchants process it for transactions.

Refines Checkout Conversion Rates

Extensive friction at the checkout step of the payment experience is one of the frequent causes of checkout abandonment. Since customers demand a seamless payment experience, numerous online businesses offer flexible options like storing cards on file, using one-click checkouts and using mobile wallets.

Network tokenization provides a more frictionless payment process that is secure and user-friendly payment, boosting checkout conversion rates and revenue opportunities.

Enhances Authorization Rates

One of the challenges in completing a transaction is validating a customer’s identity and payment details. Without network tokenization, creating a frictionless checkout experience for customers while meeting strict security and compliance regulations is challenging. With network tokenization, the tokens issued by card networks are shared with the issuers. This allows the issuers to control the merchant’s token, making it simple to authorize transactions, boosting authorization rates.

Diminishes Payment Declines

Payment fraud management is a top priority for most businesses. Businesses need to establish a balance of not allowing fraud impact the revenue and harm their reputation, without being over-protective to declined payments from legitimate customers. They can utilize network tokens to elevate the payment security strategy and mitigate the payment issue. Tokens do not expire and do not require frequent updates due to fraudulent activity. Fraudulent transactions made with one token merchant do not impact other network tokens within the payment ecosystem. Hence, these tokens can help reduce businesses’ fraud-to-sales ratios and payment declines, leading to higher payment success rates. Additionally, tokens are the only non-sensitive placeholder for the basic cardholder information, hence cybercriminals cannot hack the information if gained access to it.

Also Read: Efficiencies of Cloud Computing in Financial Services

Improves Customer Experience

A better customer experience is achieved when merchants emphasize creating a safe, seamless, and frictionless online payment process for customers. With network tokens, customers do not necessarily have to update the expired payment methods stored on their user accounts. Post-authentication of the cardholder, these tokens do not require a verification method to process payments. This is ideal for customers who may need to remember or enter the incorrect verification code leading to a false decline and missed sales opportunities for merchants.

Transactions using network tokens boost higher authorization rates and minimal interchange fees compared to standard provider tokens. Therefore, customers can relish an optimized checkout experience to help establish a dependable revenue stream.

Apoorva Kasam
Apoorva Kasam
Apoorva Kasam is a Global News Correspondent with TalkCMO. She has done her master's in Bioinformatics and has 18 months of experience in clinical and preclinical data management. She is a content-writing enthusiast, and this is her first stint writing articles on business technology. She specializes in marketing technology, data-driven marketing. Her ideal and digestible writing style displays the current trends, efficiencies, challenges, and relevant mitigation strategies businesses can look forward to. She is looking forward to exploring more technology insights in-depth.


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