In today’s digital-first payments landscape, businesses need to embrace secure and efficient payment processes to safeguard sensitive information and improve customer experience. In this climate of increased consumer expectations, Network Tokens have emerged as a powerful tool in the global payments landscape. By replacing conventional card information with unique digital tokens, Network Tokenization technology enhances security for online transactions, helps reduce fraud rates, and improves payment processes, particularly for recurring payments.
What are Network Tokens?
Network Tokens are 16-digit digital tokens generated by card schemes including Visa and Mastercard, replacing the Primary Account Number (PAN) in payment processes. When a consumer’s card is stored for recurring payments, a network token is created and used instead of the PAN during transactions. These tokens are specific to a cardholder-merchant pair, enhancing security by making the original card details virtually unusable outside their intended environment. Additionally, these tokens can be automatically updated in case of card changes, minimising disruptions and reducing the need for manual updates.
The benefits of Network Tokenisation
Improved Security: Protecting sensitive data
Network Tokenization significantly boosts security by replacing sensitive card data with a token. Even if network tokens are intercepted, they cannot be used outside their specific context, drastically reducing the risk of fraud. This added layer of security is especially valuable for businesses handling recurring payments, as it reduces the risk of data breaches and fraudulent transactions.
Higher Authorisation Rates: Streamlining transactions
Network Tokens help improve payment authorisation rates by providing real-time updates and ensuring that transactions are processed smoothly, even if a card is reissued or expired. The card issuer’s increased visibility into token-related activities also boosts their confidence in approving transactions, leading to higher conversion rates and fewer declined payments.
Cost Savings: Reducing transaction fees
Card networks impose higher fees for non-tokenized recurring transactions. By adopting Network Tokenization, businesses can potentially reduce costs associated with these fees. Additionally, the streamlined processing reduces the operational costs of managing payment data, leading to overall financial benefits.
Real-time Updates: Reducing manual processes
A key advantage of Network Tokenization is its dynamic update capability. If a customer’s card is lost, stolen, or expires, the associated token is updated automatically. This ensures continuity in recurring payments without requiring customers to manually update their payment details, reducing churn and improving the customer payment experience.
Easy Integration: Simple setup for businesses
Integrating Network Tokenization into existing payment systems can be very straightforward, allowing businesses to continue operating without disruption. For example, Acquired.com creates network tokens for businesses in the background, so they can continue to send recurring payment requests as normal, while the customer experience remains unaffected. For businesses partnered with Acquired.com, Network Tokenization is supported for both Visa and Mastercard transactions.
Get ahead with an easy integration for Network Tokens
Network Tokenization represents a key step forward in securing online payments, mitigating fraud, and streamlining the customer experience. By replacing sensitive card data with unique tokens, it enhances security, boosts authorisation rates, reduces costs, and ensures smooth payment processes. For businesses, especially in the UK, implementing Network Tokenization is not just about meeting regulatory requirements—it’s about staying ahead in a competitive digital marketplace.
