Vaulting and Tokenization Are Key to a Seamless Omnichannel Payments Experience

According to McKinsey, nearly three-quarters of people who have tried curbside; buy online, pick up in-store (BOPIS); or delivery want to continue using these services after the pandemic ends. Customer expectations have changed, and it’s become key for retailers to adopt different types of touchpoints across both physical and digital channels.

To support the successful execution of these services, retailers must have a variety of omnichannel capabilities. However, when it comes to payments, what do retailers need to ensure the checkout experience is fast and seamless across all channels?

The answer is vaulting and tokenization, or the process of switching out sensitive payments data with randomized data. Enabling vaulting and payment tokens is key to realizing true omnichannel payments, and ultimately helps retailers drive customer loyalty.

Ease the Minds of Omnichannel Shoppers

Credit card fraud losses reached $28.65 billion worldwide in 2019. Just recently, fashion retailer Guess announced a data breach that compromised 1,300 customers’ data, including debit and credit card numbers.

Compromises in security can result in significant loss for the retailer, as well as damage to the brand’s reputation. That’s why it’s important that retailers offer end-to-end security so customers don’t have to worry about their personal information being compromised, whether paying in-store or online.

Securely storing customer card information across different channels and points of purchase is made possible with vaulting as part of a tokenization scheme. Tokenization systems safeguard data without compromising security, no matter the payment method. By switching out sensitive payment data with randomized data, retailers can support robust omnichannel transaction processing environments and create a seamless experience across the digital and physical landscape.

Offer Easy Purchases and Returns

Let’s say a customer places a curbside order online, entering their credit card information at checkout. They’re then prompted to save their information by creating an account. The customer now has access to a portal with their card on file for any omnichannel transactions, including online and within a mobile app. This means they only need to enter their payment information once, making it extremely convenient for them to quickly make future purchases.

On the back end, the retailer saves the customer’s data and can easily recall the payments information at the time of pickup as well as to execute any returns. The customer simply provides proof of the purchase and the store associate will be able to seamlessly complete the pickup or return, delighting the customer with an excellent experience.

Automatically Apply Discounts or Loyalty Points

Because omnichannel merchants can store encrypted card information with customer-associated permanent or temporary tokens, there’s now an opportunity to automatically apply discounts or loyalty points to customer orders and purchases. With tokenization, the credit or debit card that a customer uses becomes a convenient rewards program. Instead of having to issue another card and ID number, retailers can associate each customer with their preferred payment method.

This type of payments setup means that retailers can personalize rewards based on past transactions and frequency. For example, retailers can email or send text messages with offers based on past purchases, or automatically allow customers to redeem points when they swipe their credit card. This also makes the rewards program more convenient across channels, strengthening overall customer loyalty.

A Frictionless Journey From Start to Finish

Vaulting and tokenization are powerful tools that not only make the payments process secure, but also open the door to other benefits that enhance the customer experience. Retailers can accept seamless and secure payments across every channel, easing the minds of omnichannel shoppers and retailers alike. At the same time, customers will enjoy a frictionless purchase journey from start to finish, providing the convenience today’s shoppers expect.

Ron Barker is director of application development and project delivery at OLS Payments, a company that provides software and services for processing electronic payment transactions.