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Benefits of Network Tokenization

Posted On: Wednesday, November 8th, 2023

How Network Tokenization Leads to Higher Authorization Rates and a Better Customer Experience.

Network Tokens are the next evolution in the online payments experience. They bring many advantages such as

  • Friction-less Checkout
  • Higher Authorization Rates
  • Improved Security and PCI Compliance
  • Lower risk to Merchants and Cardholders
  • Recurring, Subscriptions and Mobile Support
  • Easier synchronization of payments
  • Greater customer trust

How Does Tokenization Work

Tokenization replaces the customer’s primary account number (PAN) with a token that looks exactly like a pan and can be used directly as a substitute for a pan to make a payment. This token is unique to the customer and merchant so that the scope for misuse of the token is greatly reduced. The card number stays secure within a secure token vault.

Tokens are transparent to the Issuer; they are replaced automatically as they traverse the scheme’s network so that the Issuer sees the original pan. The Issuer is aware that the payment is via a tokenized pan and benefits during the authorization process.

The process of tokenization also allows the collection of accurate information on the merchant and the cardholder when the merchant is enrolled or the token is provisioned. This process safely collects sensitive card information and makes the data available to the payment process without the risk of data being stolen.

Tokenization creates a data rich environment for authorization by reducing everything to a single secure token, while dispersing the risks that come with data handling and the liability of data breaches.

Endeavour provides the Secure Token Vault which is linked automatically to, for example, the Visa Tokenization Service to receive updates.

Benefits to Merchants

Network tokenization helps merchants lower their risk exposure while providing more security for their customers. Tokenization protects payment data in multiple ways, ensuring that no unauthorized party can reveal the original PAN associated with a generated token.

In a tokenized transaction, the merchant never stores or processes the customer’s actual payment details. Instead, the merchant provisions a token with the Token Vault and receives a token id binding the customer details to the merchant.

When a customer buys a product from the same merchant, the token id will be used without the merchant having responsibility over the customer’s data. This is one of the core benefits of network tokenization.

If a merchant wants to store card information in their system without tokenization, they must comply with PCI DSS regulations, which are challenging to implement. Tokenization allows merchants to delegate this responsibility to Endeavour acting as the Secure Token Vault.

The problem with storing card information is off course keeping this information up to date and here again tokenization solves the problem by allowing the issuer to update the information automatically.

The Endeavour Token Vault also provides cart artwork and policies directly from the Issuer. This means that the merchant storing the card data is able to provide their customers the comfort of familiar logos and a customized display when they select a stored card.

Higher Authorization Rates

Network tokens establish a relationship between the merchant and the cardholder and this is what drives the higher authorizations.

Network tokenization, which replaces sensitive customer details with a token that can be used across payment networks, helps reduce the amount of falsely, declined transactions by allowing for the payment information behind each token to be automatically updated. This helps to ensure that fewer legitimate payments are lost, while at the same time making it more difficult for actual fraudsters to access customer payment credentials.

Frictionless checkout

Tokenization allows merchants to offer a seamless experience when checking out by simply selecting the payment option from the store credentials. 3DSecure is fully supported working seamlessly with the token.

Since the Card Networks issue the tokens, their Issuing banks can update card details automatically. This ensures that all payment cards stored by the merchant are up-to-date, improving the user experience and boosting authorization rates by preventing declines due to reasons like card expiration, loss, or theft.

Users also get to enjoy features such as the ability to use digital wallets or mobile payments where supported.

Centralized Deposit

The Endeavour Token Vault works impartially across multiple acquirers and payment channels providing a centralized secure depository in an environment that is PCI Level certified for both DSS and 3DS standards.

Full support for major card brands and banks

Making eCommerce Safe

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Kindly note that we do not support cardholders wanting to activate 3D Secure on their card. Please contact your bank directly using the phone number provided on the back of your card.