Tokenisation and the e-commerce experience

online credit card, e-commerceImproving data security and the online purchase experience should always be top of mind for retailers, and tokenisation is at the core of those experiences.

“If you want a continued relationship with a customer, it’s vital that you find ways to make the process quicker and easier,” said Tyson Hackwood, head of Braintree, Asia Pacific.

“We know that the greatest amount of bump or churn on a website is when a consumer is presented with something they deem to be difficult or slow. With every three seconds spent at checkout, up to seven per cent of people churn. When you have spent so much effort to get people to checkout, it’s terrible to lose them at the last hurdle.”

Hackwood said tokenisation focuses on not getting in the way of customers securely checking out. The process involves replacing a card’s information with a 16-digit randomly generated number, and completely eliminates the need to bear the high costs of becoming compliant with the Payment Card Industry Data Security Standard (PCI DSS) to store credit card information onsite.

“If they are customers who will come back time and time again, why should they keep having to provide information you, as a merchant, should already have?” Hackwood said.

Another advantage of tokenisation is that it enables you to store multiple card information helping create more seamless payments on mobile. Most importantly, it improves the security of holding credit card information.

“In years gone by, we’ve seen plenty of examples of large companies that have credit card details stolen or hacked in their systems. But if you tokenise a credit card’s information, you have turned it into a dual authenticated number that has nothing to do with the customer’s card.”

Looking to the future, Hackwood said tokenisation will allow retailers to send receipts, warranties and anything to do with the online paper trail online.

“Once your customer base is tokenised, you will also suddenly become a lot more attractive to other providers looking for partners… If you collaborate with a secondary retailer or other service provider, that token will be mobile enough to transfer between suppliers.”

In the offline environment, tokenisation will also help retailers better identify their customers. “If you know who your customer is, checkout can be as simple as the sales person filling out details on a device that’s attached to the customer,” said Hackwood. “We’ve already seen a lot of retailers get rid of the traditional checkout and go to some sort of tablet or mobile device.”

For retailers looking to start on the journey, he said it’s important to shop around for providers with experience and the global reach to facilitate international expansion.

“Some local providers lock your tokens into the contract. That doesn’t give you any flexibility in the future to change providers or to grow. You must ensure that you own the tokens. Otherwise you will never be able to take advantage of the next generation of partnerships and flow of the tokens.”

Hackwood said technology will continue to change and evolve, and if retailers are to continue to succeed, they need to move with it. And in the world of e-commerce, that means considering adopting tokenisation.


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