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Insights and Expertise

How tokenization has evolved What comes next?

Tokenization systems were initially proprietary and In one way or another, digital payments are being
limited in scope. Merchants had to rely on specific reshaped by tokenization. Innovative technologies such
payment processors, creating "walled gardens" of tokens as passkeys, biometric verification and customer white-
that lacked interoperability. This often led to inefficiencies listing are converging with tokenization, resulting in
and restricted merchants' ability to optimize their payment increasingly secure and convenient payment methods.
systems.
Mobile devices are acting as hubs for this convergence,
Today, network tokens—issued directly by payment creating unified, user-friendly systems. For merchants and
networks like Mastercard—have revolutionized the payment providers, investing in tokenization, including
process. Unlike traditional tokens, network tokens are network tokenization, is crucial. It's not just about
interoperable across platforms, gateways and merchants. mitigating fraud; it's about leading the way in delivering
They provide additional benefits, such as lower processing the secure, seamless payment experiences that modern
fees and automatic updates when card details change. consumers expect.
Network tokenization's role in payments
Anne Willem de Vries, co-founder and CEO of Silverflow, combines a
Tokens help reduce friction and delays ordinarily strong analytical mindset with a passion for delivering results. After
associated with the expiry or change of card PANs, finalizing his degree in applied physics, he joined the Amsterdam office
lowering charges. Cybersource completed research of Bain & Co. He moved on to work in private equity and subsequently
showing a 26 percent fall in fraud traced to network gained experience in card payments at Adyen, where he was integral
tokenization. The token automatically updates when the to the cards acquiring team. At Silverflow, he is responsible for prod-
cards remove the additional customer details entry. uct and the overall commercial, financial and operational activities.
Silverflow is a new kind of payment processing platform designed for
This seamless experience benefits merchants, too. Higher today's payment needs and fit for the future. To learn more, visit: www.
authorization rates, typically ranging from 3 percent to 13 silverflow.com/.
percent, can significantly impact revenue in high-volume
sectors like ecommerce and digital goods. Network
tokens also enable advanced features like Click to Pay and
biometric authentication, creating a frictionless payment
experience for customers. Payments is our Business
Case study: Solidgate
• Expert Witness Consulting Testimony
Tokenization doesn't just enhance security; it also simplifies • Experience in Criminal & Civil cases
operations for merchants. Storing tokens instead of raw
card data reduces PCI DSS compliance challenges and • Payment Facilitation
protects customer information in the event of a breach. • RFP services
Additionally, network tokenization's ability to maintain • Integrated Payments
seamless transactions helps merchants retain customers • Least Cost Routing
and improve conversion rates.
• Card Network Rules
Solidgate is a great example of what tokenization can do: • Payment Gateways
the company is an ambitious payment processor, laser- • Processor Selection
focussed on the goal of processing $100 billion USD in • 'Hard to Place Merchants'
transactions in the next five years.

Subscriptions are a major source of Solidgate's revenue, and Let us demonstrate how our our Experience
that comes with challenges. On one hand, subscriptions and Knowledge can work for you!
should mean predictable sources of revenue, but in practice
they are complex and difficult to master; hence that is why Napa Payments and Consulting
there is so much emphasis on controlling churn.

Having a repeat payment fail significantly raises the (707)601-7656
possibility of a customer deciding to discontinue their
subscription, so it is vitally important that acceptance kenm@napapaymentsandconsulting.com
rates are as high as possible. Tokenization can be a major
part of this; the increase in authorization rates also napapaymentsandconsulting.com
decreases customer churn, and each customer can be
worth hundreds or thousands of dollars per year.
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