Payment security is paramount when handling sensitive information, such as consumer data, across every area of business, and the restaurant and hospitality industry is no exception. Between growing concerns over security and changing legislation around compliance (GDPR, PCI DSS), many restaurants and fast-food establishments now rely on tokenisation to keep sensitive information secure by turning private material - such as payment details - into virtual tokens. So how is tokenisation changing QSR?
Tokenisation is part of a seismic industry-scale shift towards cloud computing which has been taking place in recent years. Businesses are increasingly enjoying the convenience of gaining speedy and easy access to consumer files, irrespective of where they might be. Cloud-based systems also cost much less in terms of labour, operational and maintenance expenses. But, as the world shifts further towards total digitisation, the challenges around mitigating fraud and protecting payment data have increased. And that is where tokenisation comes in, by replacing consumer information with a secure token that protects it from being hacked. At a basic level, this means that if someone were to gain access to this token fraudulently, it would have no intrinsic value and, essentially, be meaningless in the wrong hands.
Tokenisation at a glance
Simply put, tokenisation is a measure that is designed to protect all the data related to sensitive payment credentials. These details might include:
- Credit card numbers
- Cardholder names
- Expiration dates
- CVV codes
- Bank account numbers
Tokenisation achieves this by substituting payment data with non-specific IDs known as “tokens.” Each token is generated randomly when a consumer supplies their payment information at the point of sale. Thus, tokenisation is an example of blockchain technology. By design, there is no link between the user’s payment details and the resulting tokens.
For example, a credit card number like 1111-1244-5658-1111 could be converted into a much shorter tokenised value such as 6%bHtuVzXy.
Tokens can also take different formats such as format-preserving vs non-format preserving but either way, only the merchant’s payment gateway will be able to match each token against the consumer’s information. In other words, the consumers’ sensitive financial information is unreadable by anyone else, including the merchant. Tokenisation also allows the merchant to securely store payment details, for internal tracking and reporting purposes.
While payment details are often thought of as the golden ticket for fraudsters, other data is becoming increasingly attractive to criminals for other purposes, such as ID theft. Therefore, tokenisation can also be used to counteract these additional risks because it can be used to anonymise and protect any type of personal information such as names, National Insurance numbers and ID numbers.
Benefits for merchants and the QSR industry
Fundamentally, tokenisation is a fraud prevention and management tool. But it has multiple other advantages alongside security. In a world where efficiency is king, tokenisation also serves as a way of tailoring consumer actions and preserving convenience as part of the omnichannel experience, by removing the burden of repeatedly verifying one’s identity and entering credentials.
Meanwhile, original data mining continuously provides a wide array of optimisation and performance statistics that merchants can leverage, leading to an increased understanding of consumer journeys — and ultimately, better buyer experiences.
Enhancing loyalty forms an important part of the creation of better buyer experiences. This also matters for merchants, as ensuring loyalty encourages client retention. Tokenisation and the blockchain technology behind it, solves many of the traditional pain points that consumers face, such as juggling multiple cards or passwords for different accounts. Instead, they can use loyalty tokens with a loyalty program that are interchangeable between diverse programmes and don’t lose value over time because of expiration dates etc. This ensures that the consumer can maintain their loyalty to various brands at once.
It’s all about trust
While tokenisation has become a hot industry trend, consumers are not necessarily engaged with its functionality. Instead, they desire the peace of mind that their information and identity is protected, that they can trust their favourite QSR brands and that they won’t become the next unknowing victim of fraud.
When it comes to success, consumer trust I requires sustained investment, commitment and time but can be easily lost through just one bad experience. By providing simple, secure, and cost-effective methods like tokenisation, merchants can better focus on their core business and continue developing strong personal relationships with their consumers to make them feel at ease as the economy and payment processes advance.
Practical tips for adopting tokenisation
The benefits of tokenisation are many but understanding where to start, in terms of embedding it into your systems, can be complex and perplexing. First and foremost, before making any decisions, it is important to engage with a payments provider who can clearly outline the options and solutions that are best suited to your needs and environment.
At Worldline, our recommendations centre around selecting an option that is:
- Adaptable and flexible to allow for seamless integration into your business, in a time effective and simple way.
- Compliant with the Payment Card Industry Data Security Standard (PCI DSS), which is a set of security standards designed to ensure that all companies that accept, process, store or transmit credit card information maintain a secure environment.
Able to stress test and benchmark to provide reassurance around reliability and scalability.
To find out more about improving consumer loyalty, incentivisation and tokenisation to provide a smoother, more intuitive experience, with Worldline get in touch with our experts: https://business.worldline.com/GSVcontact/confirm