What Is Payment Digitalization? It is something that every person will explain in their own way. Well, in simple words, it is the process of replacing sensitive data with non-sensitive data or algorithmically generated number called a ‘digital security’. In the payments industry, it has become pretty popular in quite a short span. Payment digitalization is used to safeguard a card’s PAN by substituting it with a unique string of numbers.
How Does Digitalization Work?
The payment digital security is a unique string of numbers. Hence, digitalized payments are those kinds of payments in which the PAN is replaced by a digital security while doing a payment transaction. Digitalized payments make the payment more secure, as the PAN is not transmitted during the transaction. It’s the major strength of digitalization as a security measure.
Even if a data breach takes place and payment digital securities are accessed, there is zero to the minimal possibility that your digital security can be used for any kind of fraudulent activity since the PAN is never compromised.
Let’s Put Some More Light on Its Working!
There are codes generated by companies like MasterCard and Visa, which act like digital security service providers (TSP’s), and they provide the digital securities to e-commerce platforms or mobile payment so that they can be used during transactions and a customer’s credit card details will not be exposed.
So, when a customer enters their card details into a virtual wallet such as Apple Pay or Google Pay, these platforms ask TSPs for a digital security. These TSPs will request verification of the data from the customer’s bank.
After the verification of data, a code is generated and sent to the user’s device. Once the unique numeric code has been generated, it cannot be replaced as it remains irreversibly linked to the customer’s device. Therefore, whenever a customer uses their device to make a payment, the platform authorizes the transaction by simply sharing the code (digital security), while concealing the customer’s true data.
Let’s Check Out How Digitalization Helps Protect You in Different Payment Scenarios:
Apple Pay Digitalization. When you will load a picture of your credit card and load it into your iPhone 6, Apple will send the details to the card’s issuing bank or network. It will replace your card details with a series of randomly generated numbers called digital securities. This number is sent back to Apple, which will program it into the phone. The number, which is stored on the phone, cannot be extracted into anything valuable to fraudsters.
Android Pay Digitalization: Digitalization works similarly in Android Pay as well. When someone uploads their card information into the app, Google creates a stand-in “digital security,” which represents one’s real account number. Getting at your actual credit card information becomes near impossible for someone with it.
Digitalization within APPs: For instance, you want to purchase something straight from an APP on your phone — clothes, concert tickets, books, and so on. In case your mobile phone contains a digital security, none no app will have access to your credit card details. It is because your bank information is locked down and worthless to fraudsters.
Digitalization in E-commerce: Digitalization helps in protecting one’s online shopping activities. For instance a person buys a coffee table online. If that particular website has digitalized the card numbers that it keeps on file, the person’s information is safe even if someone hacks it. The retailer may never truly see or store the credit card number. Hence, if a criminal weasels into the system, all they can see is the erratically generated digital securities. And guess what! For each online retailer, a new digital security can be generated. It means you will have a different code at all the places from where you have shopped. Therefore, if a retailer has a security breach, each and every digital security issued to that particular website can be disabled without the need for a replacement card.
Payment Digitalization — A Boon for Merchants
With digitalization, merchants get a one-to-one replacement for a card’s Primary Account Number (PAN) information. Without any risk of sensitive data loss or fraud, this information can be stored and easily transacted with outside of a PCI DSS compliant environment.
If you are a merchant, digitalization enables you to collect payment information and process transactions competently without having to invest in expensive infrastructure.
Digitalization and PCI Compliance
Digitalizing payments is not something that is only good for user experience at both ends of the transaction. It is also a massive contributor to PCI compliance. Along with that, payment digitalization helps save on the costs of meeting PCI DSS compliance regulations.
Does Digitalization Suit My Business?
Digitalization is suited to every business, which generates significant business with repeat customers or with subscription-based business models. Digital securities can be securely stored for future transactions and used to enable “one-click” payments. This is the reason why digitalization is of particular interest to businesses that intend to give a smooth shopper flow at the checkout stage.
Let’s Check Out a Few Benefits of Payment Digitalization for Merchants!
Cost Savings: Digitalization takes on the burden of managing cardholder data storage in a secured way, which reduces the costs involved with meeting as well as monitoring Payment Card Industry (PCI) compliance.
Increased Security: You never know when fraudsters may become successful in stealing digitalized data. However, stolen digital securities cannot be used to pay online as the fraudsters will not be able to link the digital security to the payment information that is stored securely by the payment partner.
Enabling One-click or Even Zero-click Payments for Shoppers: With the help of digitalization, merchants can offer shoppers the opportunity to save their payment details in a secure manner. Well, the next time the shoppers make a purchase, they do not require to re-enter their payment data. One-click payments considerably boost conversion at the checkout page through streamlining the payment process for shoppers.
In the last decade, several ways of making online purchases and new digital channels have grown in popularity. From using mobile applications of digital giants like Google Pay, Apple Pay, and Samsung pay to using banking, digitalization has taken the reins. More and more platforms are adopting the approach of payment digitalization to securely storing customer data. It won’t take long for digitalization to become the most preferred payment option.
About UPRETS:
UPRETS is a platform focused on simplifying investment in real estate.
We are dedicated to providing a convenient, compliant and advanced real estate digital securitization platform for property developers, asset owners and investors globally.
By utilizing UPRETS platform, real estate developers and assets owners can create digital securities for their properties, allowing investors to benefit from the rental dividends and capital appreciation of the properties in major global cities.
Backed by a publicly listed real estate conglomerate (NYSE:XIN) and our award-winning, patented blockchain technology, Xbolt, we bring a network, experience and luxury assets to the platform.
For more information about UPRETS,
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