Fact: convenience is a huge deal when it comes to keeping your customers happy. Most modern consumers are used to purchasing products and services across multiple channels (i.e., brick-and-mortar, ecommerce, mobile, etc.). They value seamless shopping experiences that allow them to buy quickly and effortlessly, regardless of platform or location.
As such, attracting and retaining customers calls for an omnichannel approach to how you interact with buyers. This applies not just to the purchasing experience but also to payments.
Enabling customers to pay for their purchases with the least amount of friction—but with highest amount of security—is critical if you want to stay competitive in today’s market.
Enter card-present tokenization, a feature by Stax that enables merchants to accept payments in person and instantly tokenize payment data for future transactions. Essentially, you’ll be able to reuse that token to process payments and refunds later on.
Learn More
What is Card-Present Tokenization?
Card-present tokenization allows merchants to process payments face-to-face and capture payment details for immediate tokenization. With this capability, you only have to ask customers to provide their payment info once, and tokenize it to securely store that data and continuously serve customers in the future.
Todd Bledsoe, Product Marketing Manager at Stax, says it best: “Card-present tokenization enables merchants to truly deliver a seamless omnichannel experience in managing and conducting transactions. It bridges the gap between different shopping channels, ensuring a cohesive and satisfying customer experience, no matter where or how a customer chooses to shop.”
How it Works
If you’re a Stax merchant, enabling card-present tokenization is easy and doesn’t come with additional costs.
From a more technical point of view, card-present tokenization works through a 6-step process:
- A payment is initiated
- The token is requested by the credit card company
- The merchant receives token
- The token is sent to be authorized
- The token is approved by the user
- Transaction is completed
The Key Benefits and Use Cases of Card-Present Tokenization
Card-present tokenization makes life easier for both you and your customers. Consider the following.
Instantly and securely capture payment information for future transactions across multiple channels
As mentioned above, card-present tokenization lets you collect and tokenize data instantly so you can store and use that information in the future. The beauty of this feature is that even when you capture the data in a brick-and-mortar setting, you can still transact with your customers across multiple channels, including online and over the phone.
This is a significant value-add to your customers because it means you won’t have to repeatedly ask for their payment info. As Stax Sales Engineer Tulio Troncoso puts it, “For the cardholder, there’s the obvious convenience of paying with the card they used the last time. There are no more scenarios of them saying, ‘If I gave you my card before, why am I giving it to you again?'”
Tulio continues, “They also get the experience of having used a payment method in one channel and getting to use that same method somewhere else.”
Use case: A consultant could capture the client’s payment information in their office. When the client gets home, they decide to purchase additional services, so they call the consultant, who then processes the payment over the phone.
Launch subscriptions and recurring charges
The benefits of card-present tokenization go beyond payment security. Once you’ve captured your customer’s credit card information, you can easily set them up for subscriptions and recurring payments.
“Card-present tokenization lets merchants initiate a membership or a subscription plan from an in-person swipe,” explains Todd. “The feature simplifies setting up recurring payments, making it seamless to transition one-time customers into long-term clients.”
Use case: A chiropractor could launch a subscription-based model that allows patients to come in a certain number of times per month when they pay a flat recurring fee.
Implement omnichannel refunds
No merchant wants to deal with refunds, but it’s part of the territory of running a business. With card-present tokenization, issuing refunds is a frictionless process because you don’t have to ask customers for their credit card or account information when handling returns and refunds.
Since you already have their payment data on file, you can quickly process the refund and send the funds back using the original payment method.
The best part? This capability functions across multiple channels, so you can manage returns and refunds consistently, regardless of where the purchase was initially made.
Use case: A customer purchases an item from a retailer via their website and decides to return the product in-store. Because the retailer has a true omnichannel solution, they simply scan the product and instantly process the refund, maintaining a smooth customer experience.
Charge card on file for canceled appointments or no-shows
Merchants can also use card-present tokenization to enforce their no-show policies. If your business operates through appointments, you can charge a fee if someone cancels or doesn’t show up at the scheduled time.
Use case: A hair salon could decide to implement a policy requiring customers to let their stylist know within 24 hours if they can’t make the appointment. Using card-present tokenization, the salon can automatically charge a cancellation fee to the customer’s card on file if they don’t comply with the salon’s appointment policy.
Tokenize card data without charging the customer
Card-present tokenization lets you tokenize card data without charging the credit card. You can swipe the card into the terminal and store the payment info on file without having to process an actual transaction at the time of entry.
Use case: A medical clinic can use this feature to swipe a patient’s card at the time of their visit and hold the data on file. The actual charge is processed later on, once insurance details and copay amounts are finalized.
Reduce the risk of fraud and data breaches
Card-present tokenization can beef up your security by reducing the opportunities for data compromise.
Tulio explains, “If I’m a customer entering my card into fewer places, then I’m also reducing the risk for anyone to steal my information at any of those points.”
He continues, “As a consumer, I question companies that don’t offer this today. I would ask, ‘Why don’t you have this? I gave you my card last time; you must not have your situation set up properly.'”
Use case: A pro service provider can rest easy knowing they’re not unnecessarily collecting credit data. With card-present tokenization, they only need to capture credit data once, minimizing the chances of fraud each time they transact with clients.
Final words
Transform how you interact with and retain your customers with card-present tokenizationby offering a true omnichannel solution. By centralizing payment methods and securing customer data, Stax not only helps you enhance operational efficiency but also elevates customer trust and satisfaction.
Whether it’s simplifying subscriptions, easing refunds, or minimizing fraud risks, card-present tokenization has got you covered.
Get in touch with us to learn more.
Request a QuoteQuick FAQs about Card-Present Tokenization
Q: What is card-present tokenization and how does it work?
Card-present tokenization is a process where the payment information from a face-to-face transaction is captured and converted into a secure token. This token can be used for future transactions without needing to store sensitive credit card details. The process involves initiating a payment, requesting a token from the credit card company, receiving the token, authorizing it, and completing the transaction.
Q: Why is card-present tokenization important for businesses?
Card-present tokenization is crucial for businesses because it enhances security by reducing the risk of data breaches and fraud. It also improves customer experience by enabling seamless transactions across various channels without repeatedly asking for payment information.
Q: What are the benefits of using card-present tokenization in an omnichannel payment strategy?
The benefits include the ability to securely capture and reuse payment information across multiple channels, simplify subscription setups and recurring charges, facilitate easy refunds, and minimize fraud risks. It allows businesses to offer a consistent and seamless shopping experience.
Q: How does card-present tokenization enhance customer satisfaction?
By using card-present tokenization, customers experience less friction during transactions. They don’t need to provide their payment information repeatedly, which makes the process quicker and more convenient, fostering loyalty and satisfaction.
Q: Can card-present tokenization be used for recurring payments?
Yes, once a customer’s payment information is tokenized during an in-person transaction, businesses can easily set up subscriptions and recurring payments. This allows for a smooth transition from one-time to long-term customer relationships.
Q: How does card-present tokenization reduce the risk of fraud?
Card-present tokenization minimizes fraud by reducing the number of times a customer’s card information is entered and stored, thus limiting potential exposure to data breaches.
Q: Is card-present tokenization suitable for all types of businesses?
Card-present tokenization is particularly beneficial for businesses that operate across multiple channels and need to manage customer data securely. It is ideal for retailers, service providers, and businesses that offer subscription models.
Q: What are some real-world applications of card-present tokenization?
Real-world applications include capturing payment information in-person for future phone or online transactions, managing subscriptions, processing omnichannel refunds, and enforcing no-show policies by charging stored cards for missed appointments.
