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 incredible user experience.
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Cards get expired, lost, or stolen, making card details stored on file outdated.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.
* At the store, the transactions are known as 'Card Present' transactions, as payment is performed using a physical card, a Point of Sale (POS) terminal and a processing network. For online purchases, the transaction is called 'Card-Not-Present' (CNP) as the card details must be manually entered in an online interface - often the merchant one - to complete the transaction..."
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- This token never gets outdated, which guarantees it can always be used for payments.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: Gemalto TSH Merchant Gateway (TMG)
TMG can help e-Commerce merchants, Digital Wallets and Service Providers:
- Ensure end-users' payment details are always up-to-date
- Eliminate false transaction declines
- Reduce fraud and risk of data theft
Single API integration to support Network Tokenization for International and Domestic networks
Reduce the time to market by half versus direct schemes connection
Investment cut by a third while enabling new tokenisation use cases and data analytics services.
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.