There are multiple reasons why consumers generally resist tedious checkout processes and choose to abandon carts over continuing with their purchase. According to a research by the Baymard Institute, consumers are likely to abandon carts if they don’t trust the platform with their credit card information (19%), or if preferred payment methods were unavailable to them (10%). Convenience and security are critical factors that a consumer considers while making a transaction.
For businesses, having your customer’s payment information readily available can help reduce friction during checkout. However, storing this information securely while remaining compliant with legal regulations is a considerable task. A reliable, compliant payment vault that can enable you to offer exceptional payment experiences to your customers is the solution for you.
What is a Payment Vault?
A payment vault, also known as a token vault, is a digital database that stores sensitive information like credit card, bank account details, etc. However, instead of storing raw information, it takes security measures using tokenization to protect the data in the vault. In a credit card vault, card information is saved in the form of a unique token that is used in place of sensitive details to process payments. These tokens can also be used across platforms as network or multi-merchant tokens, allowing tokens to be recognised by multiple merchants, making transactions easier and more seamless.
The most common implications of a credit card vault can be seen in the following use cases:
- Recurring payments and subscriptions
- One-click checkouts
- Repeat transactions
How does a payment vault work?
A payment vault stores, secures, retrieves, and manages tokenized payment data. Once the payment data flows in, it is converted into a token and stored in an encrypted database. When a request to use this payment data arrives, the vault retrieves it to make a transaction.
Additionally, a payment vault also manages the lifecycle of the token by deleting expired or unused tokens, reissuing a new token if card details change, and maintaining compliance with PCI DSS and other regulatory requirements.
Who maintains a payment vault?
An in-house payment or credit card vault can allow businesses greater control over their storage, architecture, and custom integration workflows. The costs and compliance requirements associated with maintaining a payment vault can be laborious and require greater engineering and regulatory effort. This can be successfully accomplished by businesses with robust technical, security, and compliance capabilities. It demands a significant investment of effort into creating a payment vault, which could instead be used to focus on the core objectives of the business.
In such cases, they may outsource the effort to a third-party payment vault, offered by payment ops. businesses like Juspay. A third-party payment or credit card vault comes with built-in compliance and security measures, readily available APIs, tokenization, and are maintained and updated without requiring business overhead. This can help businesses take advantage of already established, compliant infrastructure, requires less technical expertise to integrate, and saves a significant amount of time.
Benefits of a payment vault
1. Improved security
Payment or credit card vaults are by definition a critical resource for businesses requiring secure storage for their payment data. Tokenization does the heavy lifting when it comes to protecting consumer credit card data, minimizing the risk of breach and fraud by preventing access to it, keeping both consumers and businesses safe.
2. Simplified compliance
With industry regulations evolving and growing each year, it is increasingly difficult for businesses to keep up without dedicating a significant amount of time and resources to complying with them. A payment vault takes up the burden of regulatory compliance, and associated audits and costs, as businesses don’t store payment data directly.
3. Centralized data management
A payment vault becomes the singular point of storing, tracking, and maintaining payment data which can be retrieved as required. Storing tokens in multiple places can lead to extra costs and hamper consumer experience if their details are repeatedly requested. This centralized payment or credit card vault can help businesses update card details, retry failed transactions, and keep consumer data secure in one infrastructure.
4. Enhanced customer experience
Checkout experiences can often make or break the relationship between businesses and their consumers. Credit card vault helps eliminate the factors that consumers generally avoid engaging with during checkout, like distrust in the platform or having to enter credit card details multiple times. An efficient checkout process can result in repeat custom and strengthen customer trust.
How does Juspay help?
Juspay enables businesses to reduce significant resource allocation to store and manage payment data by taking over the compliance and engineering burdens. It offers a comprehensive payment vault solution that is PCI-DSS compliant which enables merchants to store, retrieve, and manage network tokens, Payment Service Provider (PSP) tokens & device tokens.
With a PCI-compliant, streamlined, and customizable token management system, Juspay gives merchants the choice to configure the credentials of their own token requestor. Merchants can use use Juspay’s token vault to pass pass payment tokens to any processor
Juspay’s payment vault is created to empower businesses to focus on their objectives without having to worry about building and maintaining a sensitive payment infrastructure themselves. These businesses can use the vault to then offer their consumers seamless payment experiences while Juspay takes care of everything behind the scenes.
