Frederic Frizzarin, Head of Pre-Sales, Ingenico Enterprise Retail writes for Payment Expert on the imperative role of tokenisation in boosting not only ecommerce engagement but also that of the retail sector. 

Even before the coronavirus pandemic hit, ecommerce was trending upwards. As consumers become more accustomed to this convenient way of shopping with desired items delivered to their door with just a click, merchants are increasingly expected to cater appropriately.

This isn’t just the case for online commerce, however. Today’s consumer can be put off making in-store purchases if they so much as have to dig out a debit card, since developments such as mobile wallets have become the ultimate convenience.

As such, retailers now more than ever must consider how best to provide a frictionless experience if they want to remain competitive and ensure conversions in this fast-paced modern world. Moreover, as digital payments systems have developed, so too have data regulations, adding another important consideration to retailers’ plates. Their systems must be data-secure, but the service needs to remain simple and smooth.

Data security is crucial to prevent retailers from having to deal with unnecessary chargebacks and refunds, as well as reducing the risk of a potentially catastrophic data leak. Fortunately, retailers don’t have to do all this alone – payment partners are on hand to guide you. 

Tokenisation is a key way to remain data-secure whilst also providing a frictionless experience. Let’s take a closer look at how this works, the benefits tokenisation can provide, and how retailers can implement it.

How tokenisation works

Tokenisation is a system which enables the customer to save their details with a retailer for later use. This means that in future, anytime they want to buy something with your business, their payment details will already be stored, and this makes for a much smoother checkout process.

When it comes to online shopping, a customer will experience tokenisation in the form of a “remember me” button on the webpage into which they’ve registered their payment details. Backstage, Ingenico will save this raw payment data on secured servers, scramble the real details into a code, and send the “token” to the retailer. The merchant then links the token to the customer’s profile so there’s no need for them to input their details into the same site again.

Tokenisation isn’t limited to online shopping however, it can also enable the seamless interaction of an omnichannel shopping experience. For example, should a customer buy something in-store, but then phone a call centre to make a return, the call centre will be able to track and refund their purchase by using the token generated during the in-store transaction. Or, for a click and collect solution, tokenisation can enable a store to match up a customer with their online purchase by simply scanning their card details. 

In a nutshell, tokenisation helps retailers implement stronger fraud management by enabling them to better recognise genuine customers, as well as allowing them to undertake customer analysis across channels.

Business benefits

By now you’re aware of how tokenisation allows retailers to store customer details online securely and enable speedy one-click checkouts. But its advantages don’t just stop there – data insights made available by tokenisation can really boost business operations by showing merchants how customers use their service. This analysis can help retailers source the origin and ending of the payment journey, for example, or track the percentage of online vs in-store sales.

It’s not just insightful data that tokenisation can offer but it can improve customer loyalty and therefore multiple sales by enabling retailers to implement subscriptions or recurring payments. This means that customers aren’t forced to keep going through a laborious payment process when they just want to reorder frequently bought products. It’s also an easy way to implement successful reward schemes, as all the valuable information gained from tokenisation helps retailers to keep track of and personalise the customer experience. 

The next obvious question then, is how to implement this into your business. By partnering with a provider with the right expertise in delivering payments processing – including tokenisation, in-store, online, or via omnichannel solutions – they can evaluate your unique needs, advise on what your customers are looking for, and provide solutions when the time comes to upscale. 

Taking advantage of this means retailers can provide a payment experience across channels that is fast and secure. It will also give customers ease of use to make the checkout experience as quick and easy as possible. This in turn can improve customer loyalty, incentivising customers to continue shopping with the same retailers, using tokenisation to provide a smoother, more intuitive customer experience and thereby growing revenue.