Ever serious about its innovation, ING is trialing tokenisation – a fast, safe payments solution that replaces sensitive customer data with non-sensitive tokens.
In an innovative move to make payment transactions part of a seamless checkout experience, ING is launching a ‘tokenisation trial’. First, only in the Netherlands, with food retailer Albert Heijn, but when proven successful this innovative payment solution will be extended to other clients and other countries.
Handy for repeat purchases
The tokenisation process replaces sensitive data (a customer’s bank details), with non-sensitive data (a string of random numbers known as a ‘token’) and benefits both customers and retailers. Simple and safe, it saves customers from having to fill in bank details every time they make an (online) purchase, making it particularly relevant for repeat purchases and subscription payments.
Once customers have given their consent, retailers create a token for them unique to that retailer for use in its (web)shops. Customers can manage their tokens in their banking (or retailer’s) app; they can also decide if they want to be asked for additional verification when confirming the order, such as fingerprint ID or face recognition.
For retailers, tokenisation has the huge advantage of eliminating the need for keeping and protecting sensitive bank data for each customer. All they retain is the token, a random string of numbers that in no way contains account information or personal data of a particular customer. This makes the system virtually hacker-proof. Tokenisation also eliminates the obstacle of outdated account information blocking a payment.
Market experience shows tokens are currently boosting conversion rates by some 6%. To optimise tokenisation ING is using a standard developed by MasterCard that generates, distributes and ‘reads’ the tokens for the retailer and the bank.
The customer decides
Tokenisation is not intended to replace existing payment methods but to give customers a choice. The customer decides which method – iDEAL, PIN, credit card, tokens, etc., is best for any particular situation.
This is not the first time ING has collaborated with Ahold Delhaize (Albert Heijn is a subsidiary). Both companies are known for their innovation and for putting the customer first; other co-created projects include online payment requests and a pilot ‘grab and go’ Albert Heijn store, which was unmanned.
Given that customers are demanding more and more convenience, in shopping but also in payments, this trial is expected to be the start of something big.
See our infographic for a quick overview on what tokenisation is and for whom it is for.