How to optimise payments using network tokenization

Businesses need secure payments while continuing to increase authorization rates. Network tokens help to address these needs. They have become a popular way to process card payments that help keep customer payment data more secure while increasing authorization rates, providing a more seamless customer experience, and potentially reducing payment costs.

So what is a network token?

In simple terms, “tokenizing” is the act of substituting something sensitive for a representation of this sensitive information - like when you go to an amusement park and exchange your cash for chips.

Network tokens are directly provided by card networks, such as Visa and Mastercard, as a substitute for the 14 to 19 digit primary account number (PAN). This network token can be used instead of the PAN when processing payments and is more secure than using PANs as:

  • It minimises the risk of exposing customers’ sensitive information because a token is passed around instead of the raw card details, and

  • The token is unique to the customer and merchant pairing, and can’t be used by a bad actor for any merchant online like they could with the PAN.

Why is network tokenization important for ecommerce now? 

Cards are still a hugely popular online payment method globally but also where a lot of fraud occurs. In 2020, there was a total of $28.58 billion credit card fraud loss for card issuers, merchants, and consumers. And this number has only been increasing. 

The result is that online businesses are faced with a lose-lose situation. Decline every card transaction that looks suspicious or accept potential fraud - both of which could bring huge revenue losses. 

The Primer approach to network tokenization 

Network tokens are agnostic of processors as they are provided directly by the card networks.

Primer acts as a centralized Technical Service Provider (TSP) providing a unified approach to network tokenization, helping to drastically simplify the generation, application, and management of network tokens.

Agnostic tokenization means freedom

  • Dependences are gone - keep working with your favourite payment processors without restriction, the data is on your side.

  • Consistent experience for customers - customers and their stored payment cards are not impacted when you change PSPs

  • Never miss a payment - PSP is down? Payments are being rejected for a card type or country? You can easily retry all payments seamlessly as tokens can be utilised across other payment processors.

Benefits in using network tokenization for online payments 

Enhance security

At the time of customer-initiated payments, Primer generates a one-time cryptogram to act as a substitute for the CVV when making a payment request. A bad actor with the network token won’t be able to generate the cryptogram and the payment won’t succeed.

Capture more revenue

Never lose a customer due to an expired, lost, or stolen card. Subscriptions such as Netflix, Amazon or Deliveroo rely on recurring payments but if a customer card expires, the payment will fail resulting in missed or lost revenue. Network tokens are dynamically updated with the latest card data, meaning less false declines due to expired cards. 

Seamless checkout experience 

Payment declines are costly business. In fact, 62% of customers who experience payment failures will not return to the same website to try again. By automatically updating card details on file, customers never have to lift a finger and can focus on that all-important conversion. With seamless updates to the card, network tokenization removes friction from the checkout and therefore improves authorization rates. 

A no-brainer for payments 

Network tokens not only protect your business but improve the overall payment experience. Throughout the card lifecycle, customer details are safe and secure, whether cards have expired, get lost or stolen so it’s no wonder why this feature is among one of the hot topics right now for payments - it’s a no-brainer.

Common questions with network tokenization   

Who issues network tokens? 

A network token is generated from the card network directly and is processor-agnostic. This is tied to the account of the card and any updates (e.g. new card details) are sent from the card network to the token requestor (Primer in this instance).

Card networks mandate the issuers they work with to adopt network tokens. 

Do network tokens expire? 

Yes - but new expiry dates are pushed to the token requestor via a webhook in real-time, alongside any other card updates.

What’s the difference between network tokenization and PCI tokenization?

PCI tokenization is where anyone generates a token and uses this instead of raw card data. Primer does this now, as does any PSP.

A network token is generated from the card network directly and is processor-agnostic. This is tied to the account of the card and any updates (e.g. new card details) are sent from the card network to the token requestor (Primer in this instance).

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