As more online businesses emerge, the risk for cyber attacks will naturally increase, especially during the current pandemic when millions of people shop from home. Indeed, online shopping is a convenient option that 2.14 billion customers around the world enjoy. Today’s digital shoppers use various methods to make purchases, such as mobile wallets, credit cards, debit cards, and even bitcoins. Unfortunately, cybercriminals take advantage of businesses that fail to secure customers’ payment details, leading to compromised data, loss of business reputation, and lawsuits. Let’s take a look at the benefits of payment tokenization for ecommerce businesses to help illustrate the importance of securing your sensitive data.
How Does Payment Tokenization Work?
Payment tokenization refers to the process of replacing sensitive payment data with a randomly generated set of numbers known as a token. In the ecommerce space, sensitive data includes credit card numbers, bank account numbers, names, addresses, and more. To keep customers’ payment information secure, tokens do not contain any sensitive information that could be compromised due to a data breach. Tokens typically have thirteen to nineteen alphanumeric characters. These tokens can be stored and accessed in an organization’s internal systems, while the original data is kept in a secure external environment.
Unlike encryption, tokenization produces tokens that are unique and irreversible. Since tokens do not represent any direct relationship with the original data, tokens cannot be reverted back to the original form. Even if an organization suffers from a breach, the sensitive data will not be compromised due to payment tokenization. In turn, this will help prevent the business from experiencing severe legal and financial troubles.
What Are the Benefits of Payment Tokenization for Ecommerce Businesses?
As you can imagine, payment tokenization plays a crucial role in helping ecommerce sites safeguard customers’ payment information. After all, cyber attacks like data breaches and credit card fraud have lasting adverse effects on businesses. Keep reading to check out the top benefits of this type of tokenization for digital organizations.
Instead of storing your customers’ payment information in its original form, payment tokenization replaces this sensitive data with tokens. These tokens do not contain any valuable data for hackers attempting to compromise your customers’ payment details. In turn, this adds another layer of security for customers on your website.
If your business stores and accepts credit card information, you are required to be PCI DSS compliant. While it may seem easy, meeting these data security requirements is time-consuming and costly for most organizations. A payment tokenization provider should already be compliant, which means you can delegate much of this ongoing responsibility to the third-party provider.
Improve Customer Trust
When a data breach impacts a company, this significantly reduces customers’ trust in the company. This is understandable because customers need to feel confident that online businesses will protect and secure their personal information. After all, no one wants their personal information to fall into the wrong hands. By working with a cloud tokenization provider, your business will not have to store any credit card information in your internal environment. This will virtually eliminate the risk of customer data being stolen, exposed, or compromised by cybercriminals. Indeed, your customers will then view you as a more trustworthy, reputable business dedicated to protecting customers’ payment information.
Improve Customer Site Experience
Every business has unique payment needs, such as offering in-app purchases, recurring subscriptions, or the ability to send tokens to multiple gateways. A flexible data security provider can meet the requirements for these use cases, which will likely change over time. No matter how customers prefer to pay, a good tokenization provider can help ensure your organization’s sensitive data is safeguarded from harm.
Want to learn about our TokenEx Account Updater?
If your business stores customers’ financial data in your internal environment, this can have a devastating impact if you suffer a data breach. Indeed, you are responsible for protecting your customers’ data. When a cyberattack strikes, your organization will likely be held accountable for this disaster and incur steep fines. Cybercriminals will target insecure systems that store valuable data, which they will use to sell to others or make fraudulent purchases. A 2021 report by Ponemon Institute found that the average cost of a data breach is $4.24 million.
While tokenization does not prevent data breaches, it does help prevent a breach from compromising customers’ valuable payment information. These providers will store the original data in a secure token vault, while the tokenized version will be accessible to you for maintaining business operations. Hackers will have no use for tokens as they do not contain any relevant data.
Secure Payments Are a Must for Online Businesses
No matter what type of ecommerce business you own, you must prioritize securing customers’ payment information. Payment tokenization is an effective solution with several benefits, including improving your data security, site checkout experience, and customer trust. Additionally, you can pass off the task of achieving and maintaining PCI compliance to the tokenization provider. If you are considering payment tokenization, we hope this article helped highlight the primary advantages to help you make the best decision for your company.
Contact TokenEx today to learn more about our payment tokenization designed to secure all of your payment data. This includes primary account numbers (PANs), card verification values, automated clearing house transactions, and much more. Our expert cloud-based services work behind the scenes, so you can focus on growing your business and achieving your goals.