*This is in partnership with BQ Prime Brand Studio
Online shopping and cashless payments grew by leaps and bounds in the pandemic and a trend that was already growing got a power boost. Over 2.14 billion people across the world now reap the benefits of online shopping, and the number is only rising.
The flipside though is that with such a humungous number of users and transactions, the risk of being targeted by hackers and scammers rises significantly. Statistics from TransUnion show that digital fraud attempts in India grew by 24.87% across industries in just a quarter between 2020 and 2021. The issue is not just at the user level but when hackers go after databases of online platforms or merchants to harvest user card data.
To reduce this risk, the Reserve Bank of India has mandated tokenisation from October 1, 2022, to ensure that user card data is not stored with online merchants and platforms. Since actual card details are not shared with the merchant during the transaction, a tokenised card transaction is deemed safer, while ease of use is not compromised either.
Here are 5 key benefits of tokenisation for customers as well as merchants:
1. Increased Data Security
Tokenisation replaces confidential card data with a token that allows the transaction just as smoothly and quickly but without any actual card data being retained with the merchant. For hackers aiming to steal user data, these tokens contain nothing of value. Hence, customers and merchants will benefit from an additional layer of protection when transacting online.
2. Better Payment Experience
Tokenisation ensures that customers have a smooth and easy payment experience, because it allows for a quick payment process, in addition to ensuring peace of mind. Customers who do not opt for tokenisation of their debit and credit cards will have to manually enter their 16-digit card number, expiry date, and the CVV each time they want to make a transaction.
3. Exclusive Benefits for you
To help customers tokenise their cards and benefit from additional protection and ease of use, merchants are incentivising customers to save their debit and credit cards as tokens on their platforms by providing discounts and offers. Besides, paying via cards is rewarding in many other ways, since card issuers work with merchants to regularly provide discounts and other attractive offers. Merchants also offer easy EMI facilities on many cards, which makes buying big-ticket items far easier on the pocket.
4. Enhanced Trust Factor
When a company suffers a data breach, trust in the business is seriously undermined. According to a Centrify study, 65% of data breach victims lost trust in the company holding their data. Tokenisation ensures that e-commerce companies will not store any card information on their servers. This virtually rules out the possibility of cybercriminals stealing, exposing, or compromising customer data. In turn, customers’ trust in digital institutions will rise, leading to increased online transactions in the future.
5. Compliance With PCI-DSS
Merchants must comply with a payment security framework called PCI-DSS. Most merchants find that this is time-consuming and costly. Because a payment tokenisation provider would already be compliant, merchants can now easily outsource this obligation to a third-party provider.
Tokenisation is fast becoming the cornerstone of digital transactions. As it comes into force in India on October 1, 2022, customers and merchants alike can enjoy the positive benefits of tokenisation in terms of the overall sanctity and security of digital modes of payments, and customers will also benefit from super speedy transactions.
Click here to know how to make you Mastercard safer, faster and smoother and earn rewards.