EMV Tokenization for Digital Commerce
While online commerce continues its unstoppable growth, Card on File payments (using customer card information already stored from a previous transaction) make their mark by enabling exceptional use cases.
They are ideal for one-click orders, subscriptions, digital wallet transactions or instalment payments.
However, false declines are still extremely high on Card Not Present compared to Card Present.
A 2019 MasterCard study shows that only 80% of transactions are approved in online commerce, compared to 96% for purchases performed in physical stores.
Why is it so?
This low acceptance rate has mainly two reasons:
Cards get expired, lost, or stolen, making card details stored on file outdated.
Cards payment are frequently, most of the time erroneously, considered fraudulent by issuers, leading to a decline.
Not only this represents a direct loss of revenue as the outstanding purchase cannot be completed, but it also results in a bad user experience leading to customer attrition (unhappy customers tend to go to competition) and loss of subsequent revenues.
But stay with us, here comes a new standard for Credit Card on File.
Enhanced Card on File: the EMV Tokenization or Network Tokenization standard
To solve these challenges, Payment Networks, have created a standard to secure and enhance Card on File called EMV Tokenization or Network Tokenization.
An EMV token – an alias which has the same format as a PAN- is mapped to and used instead of the physical card number.
The good news?
- This token never gets outdated, which guarantees it can always be used for payments.
- It also provides several layers of security, giving more confidence to the issuer to approve transactions rather than wrongly turning them down.
Now it's time to implement.
EMV Tokenization in practice: The Thales TSH Merchant Gateway (TMG)
TMG can help online Retailers, Digital Wallets and Service Providers:
- Ensure end-users' payment details are always up-to-date
- Eliminate false transaction declines
- Reduce card skimming fraud
Single API integration to support Network Tokenization for International and Top Domestic networks
Best time-to-market by halving Network Tokenization implementation timeframe and effort vs direct scheme integration
Investment cut by a third while enabling multiple added-value and future use cases.
Unlimited scalability, Merchant onboarding capacity and ultra-low latency thanks to a cloud-native platform
More resources on tokenization and authentication
Now it's your turn
Get in touch with us if you are interested in learning more about Thales' tokenization platform and how we can help you get started.
Just leave a reply in the contact form at the bottom of our page, and we will contact you.