Tokenization: Embracing the great unifier

When it comes to building exceptional payment experiences, it can feel like there's a lot to juggle. Consumers, regardless of whether they're shopping online or in-person expect effortless, secure transactions across devices and payment methods.

Now, more than ever before, consumers expect a unified commerce experience. This means they are recognized in every channel during their payment journey and receive a consistent experience across all points of interaction. An example of this is someone who wants to use loyalty rewards to make a purchase in-app, and then pick the item up in-store.

In the wake of COVID-19, consumers and businesses alike expect a digitally enabled experience. A recent study from Visa found that 78% of global consumers have adjusted how they pay for items due to intensified safety

Andre Machicao, SVP, Global Head of Product, Cybersource

concerns, and 70% of consumershave used a new shopping or payment method for the first time since the start of the pandemic.

In this environment, tokenization strategies are more critical and relevant than ever, and there are many considerations for merchants and service providers seeking to capitalize on these trends and meet the consumer demands for digital experiences.

Unlocking the power of tokenization
Tokenization is a central capability for enabling cohesive consumer experiences and helping to fight against fraud. At its core, tokenization replaces a cardholder's 16-digit Visa account number with a secure identifier that protects the underlying card number from fraudsters. With tokenization, the primary account number is not transmitted and the technology helps protect businesses from a data breach and enables them to better manage their PCI DSS security compliance.

While security remains an essential element of tokenization, there are a multitude of additional use cases, including:

• Loyalty reward programs: Tokenization can help securely manage customer data, allowing businesses to enable a central solution for customer identification, ensuring a consistent application of loyalty programs.
• Card-on-file and subscription payments: Card-on-file and recurring billing are no longer the exclusive purview of subscription billers. These capabilities are now permeating a wide array of industry segments supporting both unique and repeat purchase experiences. Tokenization enables businesses to keep customer payment credentials current and maintained for a seamless check out or subscription payment experience.
• "One-click" checkouts:Similarly, tokenization is interoperable with Click to Pay technology, which aims to make the online checkout easy, smart and secure for consumers by replacing the time-consuming key entry of account numbers and personal information at checkout.

Reevaluate your tokenization strategy
Embracing tokenization is imperative to navigating the current business environment. Before you begin, here are six questions to ask yourself and your team in order to evaluate your tokenization strategy.

1. Are you thinking of your tokenization strategy as a key lever in delivering improved customer experience and driving business growth overall, rather than solely as a security solution to protect sensitive data?
2. What is your organization strategy for managing a growing set of sensitive customer information and data related to improving that customer experience?
3. How are you bridging the customer experience, connecting across all channels?
4. Does your strategy enable the creation of new digital experiences for customer tracking, loyalty, rewards?
5. Is your token strategy future proof? Does your implementation leverage the evolving ecosystem?
6. As part of your strategy are you supporting industry-wide developments?

Addressing these questions and developing your token strategy accordingly will ensure your business is positioned to maintain security and minimize operational costs, while growing and thriving.

Tokenization is the lynchpin in not only enabling these digital experiences, but in also meeting the growing consumer expectation for unified commerce.