Australian payments leaders CyberSource, Adyen, Rambus, G+D Mobile Security, SecureCo, Ezidebit, eWAY and Bambora today committed to rolling out technology in partnership with Visa that will enhance sales conversion rates for merchants and make the payment experience easier and more secure for everyone that shops online. Work will begin immediately, in a move expected to make Australia one of fastest adopters globally.
The technology, called credential-on-file (COF) tokenisation, also strengthens e-commerce security because it means card details such as account numbers and expiry dates are not stored each time a consumer makes a purchase, removing sensitive information off merchant systems and in doing so decreasing the risk of data breach attempts. Businesses usually store card details for direct debit, top-up, loyalty, subscription or account-based online shopping.
“The collective commitment to drive tokenisation across the industry represents a win for Australian merchants, consumers, financial institutions and payments companies alike. This technology enhances the customer experience, enables greater conversion and loyalty for merchants, and protects against fraud,” said Matt Wood, Visa’s Head of Digital Product and Partnerships for Australia, New Zealand and South Pacific.
Making online shopping easier for merchants and consumers
In addition to enhancing security, COF tokenisation enables merchants to have consumer payment details instantly updated when a card is lost, stolen or expires, meaning there is no need for the customer to log in and update their details, or the business to lose out on that payment cycle.
New YouGov research shows almost one third (30%) of Australians take more than two weeks to update their details when they lose a card or have it expire, and 12% take more than a month – indicating potential time savings and higher conversion rates for merchants that adopt COF tokenisation*.
The development will also be welcomed by Australian consumers, with the same survey finding that having to update their details at merchants is the most annoying consequence of losing a card or having it expire (45%), and cancelling automatic billing is the second most annoying (43%)*.
Increased consumer trust to grow sales
35% of Australians trust their bank most with their card details, 20% trust their payments provider most, and just 5% trust individual merchants most*.
Yet if tokenisation is in place protecting their card details, 41% of Australians said they would be more likely to purchase from small retailers, 39% would be more trusting of online businesses and 40% said they would buy from retailers they hadn’t bought from in the past*.
“Australian merchants are operating in an increasingly competitive and global landscape. The opportunity to enable their growth while strengthening security is a key motivation driving this cross-industry collaboration,” said Mr Wood.
How it works
COF tokenisation replaces card details with unique digital identifiers (‘tokens’) that are used for payment without exposing a cardholder’s sensitive information. Each token is merchant-specific, so can only be used with the merchant where it is stored, removing any incentive for hackers to try to steal the account data.
Implementing the technology requires payments gateways and facilitators – in this case CyberSource, Adyen, Rambus, G+D Mobile Security, SecureCo, Ezidebit, eWAY and Bambora – to connect to the Visa Token Service, enabling merchants to subsequently tokenise stored details.