How tokens protect you and your business

Consumers and small business owners all want secure, frictionless transactions. Token technology ensures just that.

woman wearing yellow hoodie entering her card information into her smartphone

Shopping online more than ever? You’re not alone. Ecommerce sales are expected to reach $1 trillion in 2022 for the first time ever, with nearly half of those transactions happening on a mobile device. And a record 17 million new small businesses are projected to launch in 2022, many of which will depend on online sales.

Making those transactions faster and more secure not only improves the customer experience, it also helps businesses thrive — and tokenization is doing exactly that.


The what — and why — of tokenization


Tokenization is a process that replaces sensitive data — say, your credit card number — in electronic transactions with a secure equivalent: a token. Think of the token as a kind of secret code — to Visa, it helps make payments faster and more secure, but to someone outside the network, it’s useless, because it contains no actual customer data. With tokens, data like account numbers and addresses are never actually transmitted to make a payment. This eliminates a primary avenue for fraud.

Token technology also requires less work for the computer system than tools like encryption, making transactions faster. The beauty of tokenization is that it enhances both security and the customer experience at the same time. The reliability aspect gives merchants and financial institutions peace of mind, too.

Here’s a look at a few of the benefits that tokenized payments offer to the payments ecosystem.

Improved authorization rates

An estimated 30% to 65% of all rejected online orders are actually legitimate. And these false declines can be a big problem for retailers: 33% of customers say they won’t return to a merchant if they receive a false decline.1 So by working behind the scenes to improve the customer experience, tokenization can improve customer loyalty, too. Payment platform Adyen, for example, saw a 7% improvement in completed transactions after implementing VTS.2

Easier updates

In some cases, tokens allow for no-hassle updates of expiration dates and other info for online subscriptions or payment credentials stored with online vendors. (Check out Visa’s Card Enrichment Service.) In other words, getting a message that a transaction was declined because a card has expired could become a thing of the past.

Increased visibility into who accesses account info

The unique nature of tokens can offer some new benefits to customers. For instance, VTS offers card issuers a way for customers to see, all in one place, which merchants are storing their unique payment information. This Card on File Data API creates an always-available one-stop shop for reviewing things like bill pay, recent transactions, and more — making the customer’s life that much easier. 

Simplified PCI compliance

Organizations that manage branded credit cards need to meet the Payment Card Industry Data Security Standards (PCI DSS). Tokenization simplifies that compliance step, as it reduces the amount of sensitive data involved in transactions.

While not the most visible part of day-to-day transactions, tokens have a very real impact on the security and reliability of the digital payments that our economy thrives on.


Visa Token Service (VTS) is a crucial response to the growth in ecommerce, the need for more security, and customers’ desire for simplified transaction experiences. Learn more about Visa Token Service (VTS).    



Tag: Tokenization

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