The spectre of fraud continues to haunt merchants, with digital payment fraud across Europe rising by 43% last year. But with every additional step at the online checkout costing conversion, there is a clear business need to balance security with convenience.
Network tokenisation holds this key. New technologies are helping merchants create balance by eliminating friction without compromising on security for card payments – both of which increase conversion rates by improving the checkout experience for consumers.
Bypassing existing limitations for merchants
Card tokenisation has been around for years. It was developed to protect cardholder data by replacing it with randomly generated strings of numbers and letters.
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If a retailer’s database is breached, hackers only gain access to meaningless characters that can’t be used for purchasing elsewhere. Tokenisation also means that merchants don’t need to handle or store raw card data, reducing the scope of requirements and the risk of data theft.
However, ‘traditional’ card tokenisation has its limitations. The tokens are siloed, meaning they can’t be used across merchants. Card replacements or expirations also require manual updates, which can lead to potential declines and lost revenue.
Yet network tokens, managed by networks like Visa and Mastercard, can now address these limitations for card payments. They are dynamic, centrally managed in real time, and work across multiple merchants and channels by replacing the Primary Account Number (PAN) throughout the entire transaction flow – from merchant to payment service provider (PSP) to card network.
Combining convenience and security for consumers
But how does this result in increased conversions?
The checkout is no longer the final step of a transaction for consumers; it’s a critical part of the overall shopping experience.
Research from payabl.’s state of European checkouts report cites speed (46%), convenience (44%), and security (41%) as the top reasons for choosing a payment method. More than two-fifths (43%) of consumers claim they won’t return to a website after a poor checkout experience. For merchants, that results in lost customers and lower revenue.
Technologies like Click to pay combat these issues, providing a single, easy button for consumers to pay while using tokenisation in the background to keep their card details safe.
Replacing a traditionally cumbersome process, there is no need to input 16-digit card numbers, CVVs, passwords, or billing addresses. Once a card has been enrolled, consumers can complete purchases in just a few clicks, resulting in a faster checkout that mirrors the ease of contactless payments in-store while maintaining strong security standards.
According to VisaNet data, this reduces checkout time by an average of 40% compared to traditional guest checkouts. It also saves up to 20 seconds per transaction, helping to reduce cart abandonment given that typing in card details remains a major source of friction.
Unlike proprietary wallets, that require specific hardware, Click to pay works across all devices, browsers, and operating systems, ensuring a uniform experience for consumers. Replacing sensitive card details with secure network tokens – which automatically update if a card is replaced or expires – helps merchants approve more legitimate transactions and reduce fraud exposure, enabling a smoother, more secure process.
Further figures from Visa show authorisation rates to increase by 10% while reducing fraud by 80% when compared to manual PAN entry.
Providing a boost for checkout optimisation
Technologies such as this are already having a measurable impact on e-commerce and are set to continue. Additional VisaNet data shows that Click to pay could enable a 4.5% uplift in merchant sales, translating to a possible annual increase of €51 billion in SME e-commerce sales across the UK and EU.
Consumers will remain open to these solutions – if they know they can rely on them. Further research from payabl.’s state of European checkouts report finds that more than half of consumers (53%) are now open to switching to newer payment methods, with a similar number (48%) open to one-click checkouts, provided that the solution is backed by a trusted brand.
Network tokenisation is becoming a foundational pillar for the expanding e-commerce ecosystem, providing a boost for merchants seeking to improve conversion, build trust and increase payment reliability at scale.
Merchants can help facilitate this shift by looking towards payment service providers and trusted networks to integrate new payment solutions.
Breno Oliveira, Chief Product Officer, payabl.
