Tokenization, the process of replacing sensitive card information with a random number, has become a foundational piece of modern payment security. As of the end of 2024, around 40% of online merchants worldwide now use some form of tokenization in their payment management strategies.
The process is simple.
After a payment is initiated, the customer’s card number is swapped out for a token, with the actual data stored in a token vault managed by either the card network or a third-party service provider.
Should hackers intercept the token, the data recovered is meaningless without the credentials to access the vault. Tokens are uniquely mapped to specific cardholders, merchants, and transactions, making it impossible to copy and reuse them for unauthorised purposes.
Mastercard reports that tokenization can reduce fraud and lead to a 3% to 6% increase in approval rates.
We’ve talked before about what payment tokenization is and its benefits for merchants. Now, payabl. is teaming up with Mastercard to eliminate frustration in payments for both merchants and customers.
Tokenization creates better customer experiences…
Every customer has felt the pain of reaching checkout with a cart full of carefully chosen items, only to hit a wall. Maybe they can’t find their card to enter their payment details, or maybe they’ve saved their card in your system only to find that saved information is no longer valid.
Either way, running into these roadblocks can hinder their completion of a purchase.
Payments can make or break the customer experience, and if they disrupt the convenience of online shopping, you’re likely to lose that customer altogether. Friction in the payment process can be one of the biggest points of dropout for customers and a drag on your revenue.
It doesn’t have to be this way.
Tokenization can simplify the entire payment experience by storing card details in a secure vault that keeps the information up-to-date. When a card is reissued due to expiration, loss, or fraud, the token is automatically refreshed without need for manual intervention from the customer or merchant.
The simple efficiency of tokenization translates to more successful transactions and fewer abandoned carts. On the customer’s side of things, tokenization offers a secure method for making checkout a quick and painless process.
…without sacrificing security in the slightest
Simplifying payments doesn’t have to mean lowering your guard.
Tokenization adds an advanced layer of security that works quietly behind the scenes. Mastercard’s technology takes away the worries of both customers and merchants by protecting payment data at every step of a transaction without any extra effort required from either party.
You can think of tokenization like invisible bubble wrap that won’t interfere with your customer experience. It keeps sensitive data shielded from bad actors and safe in the event of a breach.
Mastercard developed the tokenization standard that is now used as the global industry standard for payment security. More than 30% of Mastercard transactions worldwide are tokenized, and the company now has more tokens enabled for digital payments than it does physical cards in circulation.
Your customers gain confidence while shopping with the knowledge that their card information is never at risk in your payment system. At the same time, you gain peace of mind knowing that you have access to advanced token technology available through an easy-to-use payments platform.
Best of all, tokenization streamlines the merchant journey
The benefits of tokenization go far beyond improved customer experience and security.
Tokenization can directly impact your revenue and bottom line as a merchant.
When you see sales spike online, you want to act fast to scale your business by doing things like hiring more staff or expanding into new markets. But then the chargebacks roll in, payments get reversed, and you feel your financial foundation start to shake.
Financial uncertainty and payment friction can derail your growth and multiply your stress. What tokenization gives you is stability and, therefore, certainty.
Payment tokens protect your transactions from fraud and minimise the risk of chargebacks. You can trust that the money flowing in is here to stay while also benefiting from fewer interruptions and fraud-related costs. Making the upgrade to tokenization can be your key to achieving a visible difference in your day-to-day cash flow and business growth.
payabl. x Mastercard to resolve your frustrations
We’ve partnered with Mastercard to offer our customers leading tokenization technology. With this solution, you can not only streamline customer experiences and enhance security on all ends but also vastly improve your financial stability as a merchant. Read more about a frustration-free checkout with payabl. and Mastercard.