In the evolving landscape of online payments, network tokens have emerged as an important technology that is redefining how businesses handle online and subscription transactions.
Let’s delve into what network tokens are and how they can reduce churn, increase authorisation rates and lower your payments costs.
What are Network Tokens?
Network tokens are specialised payment credentials, specifically tied to a card-merchant pair, which can be used as a substitute for a card’s primary account number. These tokens are generated in collaboration with card networks like Visa, Mastercard, and American Express. They effectively tokenize a user’s PANs into network tokens, ensuring that these tokens remain current, even if the underlying card details change, such as in the event of a lost or replaced card.
What this means in the real world is that if a customer loses their credit card or has it stolen and they cancel their card, that doesn’t rely on the customer updating their card details on your platform. If a card is updated, our gateway is alerted to make the relevant changes to ensure the next transaction goes through smoothly. Merchants avoid interruption in recurring accounts, and customers don’t get stuck with suspended services or late fees.
ArtsPay and Fat Zebra: A Strategic Partnership
ArtsPay’s partnership with its primary gateway partner, Fat Zebra, plays a crucial role in leveraging the benefits of network tokens. This collaboration allows ArtsPay customers to access this cutting-edge technology and Fat Zebra handles all the technical complexities. By integrating with Fat Zebra, ArtsPay users can enjoy the full spectrum of network tokenisation benefits without the need for extensive back-end changes or additional security measures. This part of our commitment to providing clients with state-of-the-art payment solutions.
Increased Authorization Rates
One of the standout benefits of network tokens is their ability to significantly boost authorization rates. Traditional PANs, if expired or updated, can lead to declined transactions, especially in scenarios involving recurring payments like subscriptions. Network tokens, however, remain valid and current even when the underlying PAN changes. This feature drastically reduces the incidence of declines due to outdated card information, thus ensuring smoother transactions and higher authorization success.
Lower Costs
Network tokens also present a cost-effective solution for businesses. Particularly for those on custom interchange pricing models, the utilisation of network tokens can result in tangible savings and lower costs from the card schemes.
Business Advantages of Network Tokenization
Enhanced Security: By replacing sensitive PAN information with secure tokens, businesses significantly mitigate the risk of data breaches and fraud.
Streamlined Compliance: Network tokens aid in maintaining PCI compliance by reducing the scope of data that needs protection, simplifying the compliance process.
Improved Customer Experience: The automatic updating of card details linked with network tokens means that customers don’t need to enter new card information frequently. This reduces friction and enhances the overall payment experience.
Network tokens are not just a technological advancement; they are a strategic asset in the payments ecosystem. By offering increased authorization rates, lower costs, and a host of other advantages, they provide businesses with a robust, secure, and efficient means of managing online transactions. As the digital payment landscape continues to evolve, network tokens stand out as a key new technology that companies should consider adding to their payments infrastructure and approach.