A Third of UAE Merchants Pull Card-on-File for Checkout Priority

Checkout conversion is the name of the game in eCommerce.

Merchants who increase their conversion rates typically boost their sales as a result.

The PYMNTS Intelligence report “To Boost Conversion, UAE Merchants Want Simpler, Faster Checkout From PSPs,” a collaboration with Mastercard, explored the role of technology in user experience during checkout. The results were from a survey of 300 middle-market eCommerce merchants across five international markets: Australia, Brazil, the United Kingdom, the United States, and the United Arab Emirates, with the findings focused on the latter.

Among UAE merchants, 46% see one-click checkout as a key way to reduce friction at checkout and close the deal with their online customers. Merchants there also cited other features they would like to have available to make the checkout process more seamless.

The key capability cited for providing an easier overall checkout experience was card-on-file technology, requested by a third of the UAE respondents.

Secure card on file allows merchants, PSPs and commerce platforms to tokenize consumers’ primary account numbers (PANs), according to Mastercard. Once entered by the consumers, the PAN is held on file and replaced in the system with a unique token that is used for eCommerce transactions. This helps achieve the merchant’s and consumer’s desire for a seamless transaction, as the PAN doesn’t need to be re-entered on return visits.

“Network tokenization replaces sensitive credit card information … with a unique and randomized string of letters and numbers, what is called a token,” Alex Wilson, director of global product management for Mastercard, said in a blog post. “In a network tokenization user journey, a customer would save their card on file, and the details would then be converted to a network token for future transactions.”

The network token, as opposed to the card details, is retrieved during future transactions.

“Network tokenization is the next evolution in card-on-file technology,” Wilson said in the post. “By replacing PAN with anonymized tokens, network tokenization reduces the payment card industry (PCI) compliance burden and lowers fraud risk.”

“Another benefit of tokenization is its impact on [consumer card and account] management,” the post said. “With network tokenization, card details are automatically updated when a card is replaced or expired, which leads to higher approval rates and a simplified user experience.

Gateway tokenization is similar to network tokenization in that both save a customer’s credentials on file for future use, per the post. Gateway tokens, however, do not have the same capabilities or security offered by network tokens, which remain encrypted throughout the entire payment process, making it safer. This also greatly decreases the likelihood of fraud or exposure to data breaches.

Biometric authentication uses biological characteristics to verify a customer’s identity and grants access to a secure system such as an eCommerce site or portal. The technology has advanced rapidly in the past 10 years in terms of accuracy, usability and scale, which the introduction of artificial intelligence has further enhanced, Mastercard Vice President of Product Innovation Qing Cao wrote in a blog post.

Additionally, the increasing capabilities of microprocessors and computers, as well as the continued growth of smart devices, have led to progress in biometric technology. Consumers have also become more comfortable with this method of authorization as adoption by eCommerce and other platforms has increased, per the post.

UAE merchant respondents were seemingly less concerned about security, with just one-third citing reducing fraud as a key factor, compared to 43% of their counterparts in other countries. However, tokenization processes did fit in with their desire for a more seamless transaction experience for their customers.

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