Far More than a Security Measure, Tokenization Opens the Door to Unique, Speedy and Hassle-Free Checkout Experiences
Security isn’t the only benefit of tokenization. This technology also provides a way to improve customer experiences and power omnichannel payment innovations that can drive sales and loyalty.
What Is Payment Processing Tokenization?
Credit card tokenization is a security tool that encodes payment information as a string of randomly-generated numbers, called a “token.” These tokens can then be sent through the internet or payment networks to complete a payment without the information being exposed. Tokenization in payments lowers merchants’ PCI compliance burden by storing sensitive information in “vaults” hosted by the tokenization service providers.
While the cybersecurity benefits of tokenization for payment processing are undeniable, there are many more ways in which tokenization can be harnessed to improve checkout experiences, boost customer loyalty, and cut down on abandoned carts.
3 Ways Payment Tokenization Can Be Used to Improve Customer Experiences
1. Offer Maximum Convenience and Reduce Cart Abandonment
Consumers expect fast and easy, but entering payment information is cumbersome, especially if you’re on a mobile phone. With payment tokenization, users only ever need to input their payment information once. This provides one-click convenience from credit cards.
Amazon is one of the most well know retailers that uses tokenization to simplify the checkout process. Their Amazon Pay service is so frictionless, other merchants are now offering it as a payment method on their own sites.
Merchants don’t have to stop at payment information, tokenization can be used for all types of data. For example, a customer could enter their email once and then being able to automatically receive a digital receipt every time they make a purchase across any location or channel.
2. Power Omnichannel Retail Purchases and Returns
Surprise your customers with unique experiences, such as by offering to ship an out-of-stock item to their homes when they pay, with no need to have them provide shipping information.
Merchants can also offer a better experience by enabling customers to return online purchases in-store simply by swiping the same card they used at checkout. With easy returns being a major factor for consumers across developing markets, tokenization and omnichannel retail experiences can help your business capture and retain market share.
3. Offer More Convenient Rewards Programs
Through tokenization, merchants can expand and improve customer loyalty programs in unique ways. Tokenization can be used to email customers discounts and offers based on past purchases, or to automatically redeem discounts or loyalty rewards at the point of sale without needing to carry a rewards card or remember an ID number. With tokenization, any credit or debit card can become your customers’ membership or loyalty rewards cards too.
Develop Your Own Innovations
Personal, frictionless omnichannel experiences should be the goal of any merchant. And as technology improves, sellers have access to more tools to deliver differentiated experiences that set them apart. A single token provider across physical and retail channels gives you a valuable tool that goes beyond security and compliance concerns.
To learn more about Rapyd’s tokenization capabilities contact us.