Network tokenisation explained & why it’s good for your business


Managing the lifecycle of customer payment information can be challenging. As soon as a physical credit or debit card expires, misplaced or is stolen — it's up to you to chase the customer to update it.

Sounds like an unproductive way to use your time, doesn’t it? Even worse, it can have a direct impact on your business' cash flow.

That's where Network tokenisation can save the day. By updating these details automatically in real-time.

In this article we cover:

  • What is Network tokenisation?

  • How does tokenisation work for online purchases?

  • What are the benefits of network tokenisation?

  • Is tokenisation a good idea?

What is network tokenisation?

Network tokenisation is a type of payment card tokenisation offered by card networks including Visa, Mastercard, and American Express.

It replaces the real card number with a random string of numbers called a network token. This security functionality increases your authorisation rates and reduces false declines at checkout.

Network tokenisation is not just an optional add-on to protect your customers' card data, reduce the risk of a data breach, and improve the authentication of your checkout experience. It's a foundational payment technology to enhance your customer experience and enables secure ecommerce and subscription-based transactions.

How does tokenisation work for online purchases?

Tokenisation works in much the same way as paying for a wristband at a music festival. Cash is swapped for the wristband, an item that is worthless outside of the context of the festival.

With Network tokenisation, the high-value item is the primary account number (PAN), and the low-value item is a random string of numbers.

This random string of numbers has meaning within the payment network but, like the wristband, is meaningless outside its specific context.

Unlike third-party proprietary tokens, Network tokenisation protects the cardholder’s details throughout the transaction process, delivering unparalleled end-to-end security.

What are the benefits of network tokenisation?

Network tokenisation reduces customer friction during checkout and payment processing. A unique payment token is shared across the entire payment ecosystem. This includes the acquirer, merchant, card issuer, and cardholders.

The token service provider (card network) will provision the network token so that when credit card details change, expire, or are stolen, they can be automatically updated across every location and device in the network.

This saves you having to track down new cardholder information, along with providing:

Enhanced security

Tokenising card details reduces the risk of fraud. More specifically, card-not-present (CNP) fraud — by removing sensitive data from the transaction process.

Fewer declined transactions

Expired or lost cards result in declined transactions. But with Network tokenisation, card details are updated automatically across the payment ecosystem. This results in fewer failed payments and less time-consuming admin.

Accurate cash flow forecasting

With fewer declines and increased authorisation rates you can precisely forecast your incomings for better cash flow management.

Is tokenisation a good idea?

For your business...

These benefits result in superior security, more streamlined compliance, and an instant competitive advantage, whatever your industry. In addition, tokenisation mitigates the risk of fraud, protecting your business against reputation-destroying data breaches and keeping your customers' card information secure.

For your customer…

These benefits provide an easier, faster, safer online transaction. When payment card details change or expire, they are automatically updated. This improves authorisation rates and less chance of dishonour fees. Plus, they won’t have you chasing them for late or missed payments due to out-of-date card details.

Read more: PCI-DSS Compliance - what are your responsibilities?

Network tokenisation available with Ezidebit's payment service

If you are an existing Ezidebit customer, Network tokenisation is automatically enabled on your payment methods.

Visit our FAQs page if you would like to learn more about Network tokenisation.

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