Axerve, Payment Partner to Grow, specialising in creating accessible and frictionless payment solutions for E-commerce and physical sales, today announces that it will expand its existing proprietary Ecommerce tokenization offering to include the Network Tokens recently provided by circuits such as Visa and Mastercard and welcomes Chili, an international tech media and video on demand (VoD) firm, as one of the first companies to be activated on Network tokenization. 

The enhanced solution will subsequently be rolled out with Axerve customers Aruba and Twinset in the near future.

Tokenization has a positive impact on the security and shopping experience offered to customers in E-commerce transactions. Tokenization allows merchants to retain payment credentials without having to obtain a full Payment Card Industry Data Security Standard (PCI DSS) certification. This means that by leveraging tokenization, merchants and retailers can store tokens in order to complete future payment transactions. This is particularly relevant for one-click payments and MIT payments (Merchant Initiated Transactions), where payment is initiated by the merchant without the real-time presence of the buyer, such as automatic billing.

While PCI DSS security standards, established in 2004 by circuits such as Visa and Mastercard, have helped secure credit and debit card transactions against data theft and fraud, merchants have to safely store sensitive card data during transactions and for recurring payments. Tokenization can be the solution to this problem by maintaining security benefits via the numeric or alphanumeric tokenization of card data, streamlining the process for the merchant.

There are two categories of tokens: those offered directly by the payment service provider (PSP) and ‘Network Tokens’ introduced more recently by circuits such as Visa and Mastercard. As a PSP, Axerve has offered a private solution for tokenization since 2012. This solution shifts the compliance obligations coming from card privacy rules away from the merchant and onto Axerve, which stores card PAN (Primary Account Number) data and gives the merchant a token. This token is then stored by the merchant for each new transaction performed on that card, allowing the end customer to experience a seamless payment process without privacy compliance costs unduly falling on the merchant.

The newer Network Tokens confer additional benefits to PSP tokenization as they can contribute to a further increase in successful authentication and authorisation rates. The ability to recognise more legitimate repeat customers is proven to lift conversion rates by 2.2% on average(Source: Visa). Moreover, Network Tokens can combat payment friction that emerges over the lifecycle of a card, such as at the point of card expiry or card loss and replacement. Network Tokens automatically update tokens in line with the data of the underlying card, without the need to involve the buyer.

Tokens are becoming increasingly important tools in an increasingly complex, global and competitive E-commerce context. MarketsandMarkets estimates that the global tokenization market will grow from USD 2.3 billion as of 2021 to USD 5.6 billion by 2026, at a CAGR of 19.0% during the forecast period (Source: MarketsandMarkets). Axerve’s inclusion of tokens and Network Tokens increases authentication and authorisation rates for its customers’ E-commerce transactions. For instance, Visa transaction data shows that tokens can reduce fraud by 26% compared to traditional online card transactions (Source: TechCrunch). According to leading circuit networks’ data, the increase of the transactions approval rate was between +2.5% and +6% in February 2022.

Axerve is a part of the European fintech Fabrick’s open finance ecosystem, and, beyond this, the Company supports a diverse mix of institutions, international corporations, and retail chains by offering innovative technology and data security across global payment methods.

Alessandro Bocca, CEO of Axerve, commented: “Tokens are now more important than ever in the E-commerce environment. They have the twin benefits of improved user experience and safety, the latter in turn supports increased authorisation rates.  Axerve’s inclusion of tokens and Network Tokens can contribute to a further increase in authentication and payment approval rates, as they have been developed according to international standard principles.

Network Tokens are well placed to withstand card lifecycle events such as expired or defrauded cards, which to date have interfered with straightforward payments and caused friction.

We are delighted to provide our customers with tokenization tools to create seamless experiences for end-consumers, who are freed from the need to enter the card details again from the second purchase onwards, while also effectively protecting their customer data from being compromised.”

Giorgio Tacchia, founder and CEO of CHILI, said: “Payments with fewer barriers result in higher conversion rates for our billing and also create happier customers who don’t have to face undue hassle at checkout.

Tokens remove a layer of complexity from our day-to-day operations and make our customer payments friction-free, meaning we at Chili can focus on our core business.”