Payment tokenization is a way to reduce online fraud and protect cardholder data against cyberattacks. It also has many benefits for businesses. DBS offers trading services in four currencies: USD, HKD and SGD. They also offer four other cryptocurrencies, including Bitcoin, Ethereum and Bitcoin Cash. This gives companies the opportunity to reap additional benefits and be more flexible in using digital tokens.
These are the top benefits of payment tokenization.
Helps to build consumer trust
Payment tokenization provides security which, as we have already stated, is a key benefit for businesses. It helps them build trust with customers. Despite the fact that online payments are growing, especially since millions of people have been unable to purchase online due to the global epidemic, many people don’t feel secure shopping online.
Tokenization ensures that data is properly structured and transferred, which makes it less susceptible to fraud and cyberattacks. This helps to protect online transactions for customers and businesses and builds trust over time.
Avoids expensive fines and revenue loss
Our second list of benefits from payment tokenization includes the prevention of revenue loss, and the imposition of heavy penalties by different institutions.
As you can see, data breaches can have a detrimental effect on a company’s reputation. Businesses often experience a loss of revenue as customers move to companies that take better care with their payment data.
However, businesses may lose money not only because of a data breach. If the breach affects sensitive information belonging to millions or thousands of people, they could also be subject to costly lawsuits.
Zoom is a video-conferencing platform that saw its income rise by 376% following the worldwide pandemic. After a series of cybersecurity breaches, including a false claim for end-to-end encryption and other frauds, the company was forced to create an $85 million fund in order to compensate US users.
The fee was $15 for non-paying users, and $25 for paid subscribers. According to the judgment, Zoom was also ordered to pay $21,000,000 in legal fees.
Financial bodies may impose penalties on businesses that fail to adhere to the PCI-DSS standard or suffer data breaches. Credit card issuers can impose monthly fines of up to $100,000 for non-compliance with PCI.
Let’s say that a company is subject to a credit card data breach. It could face penalties such as fines between $50 and $90 for each cardholder whose information was compromised, or termination of its relationship with the bank/payment processor.
Enhanced Internal Security
Another benefit of payment tokenization is improved internal security.
Because the token can be accessed only by the payment processor, companies can ensure that their employees and other business personnel are protected.
Supports recurring payment
Businesses will see the benefits of payment tokenization as they can accept recurring payments and other payment methods in a safe environment. This makes it easier to avoid subscription-based fees. Tokenization is an excellent way to secure recurring payments. Subscription-based services are on the rise; according to SAP Insights subscription models will account 53% of all software sales by 2022.
For everyday items, an increasing number of people are shopping online. To make their purchases more efficient and faster, they prefer to save their payment information.
Tokens and the digital payment token trade are great ways for small businesses to launch themselves into capital markets. They also simplify the market process. To learn more about digital payment tokens and exchange, visit your bank partner.