NZ's major payments companies have committed to rolling out new payment technology in partnership with Visa, and make the country one of the first to use credential-on-file (COF) tokenisation.
COF technology will strengthen e-commerce security, enhance conversion rates and deliver a simpler payment experience online as well as making savings for businesses, Visa said.
Adyen, Bambora, Cybersource, Paystation by Trade Me, and Windcave have committed to COF tokenisation to replace card details such as account numbers and expiry dates with unique digital identifiers, or token, that are used for payment without exposing 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 and decreasing the risk of data breach attempts.
“This commitment to drive tokenisation across the industry represents a win for New Zealand businesses, consumers, financial institutions and payments companies alike," said Riaz Nasrabadi, Visa’s head of product for New Zealand and South Pacific.
"The technology enhances consumers’ experience, enables retailers to retain consumer loyalty and protects all businesses from fraud.
"With the advent of open data and the creation of new experiences based on data, initiatives such as tokenisation will ensure consumer data is protected and held securely.”
COF tokenisation also enables businesses to have consumer payment details instantly refreshed when a card is lost, stolen or expires, meaning there is no need for the consumer to log in and update their details, or for the business to lose out on that payment cycle.
It is a win for merchants too, Visa said, with higher conversion rates and less time spent chasing payments likely to result in savings.
The automated process could also help prevent online merchants from missing out on subscription renewals.
A YouGov survey showed that with tokenisation in place protecting card details, 37 per cent of New Zealanders said they would be more likely to purchase from small retailers, 46 per cent would be more trusting of online businesses, and 36 per cent said they would buy from retailers they had not bought from in the past.
“New Zealand businesses, including retailers, are operating in an increasingly competitive and global landscape, in which every dollar not spent on addressing problems could be invested in business growth," Nasrabadi said.
"The opportunity to enable this growth for Kiwi businesses is the motivation driving this cross-industry collaboration."