Tokenization will play a fundamental role in the future of omnichannel payments. Wallets and payments are transforming rapidly, and there is still plenty of growth for competition. But with tokenization to keep payment data safe, consumers will be far less willing to embrace new solutions. Bitcoin has a leg up over its competitors in this regard.
Consumers are eager to try new payment methods, but they are also more aware of how their personal data is being used. Any concept or solution that does not seem capable of safeguarding that information will not gain any traction. Over the past few years, there have been far too many data breaches where sensitive user information was stolen.
Tokenization Matters More Than People Think
Diverse payment channels inherently bring more risk to the table. More points along the centralised payments chain equal more opportunities for criminals to obtain payment information.More mainstream-oriented solutions, such as EMV protection for payment cards, has proven to be unsuccessful so far. That is mostly due to merchants and consumers sticking to having their card swiped at all times.
Tokenization will play a critical role in the future of payments; that much is certain. By lowering the value of sensitive data stored on devices, it takes security to a new level. In fact, tokenization can replace the “standard” payment card credentials with virtual credentials. As this information would only be visible to the merchant and the customer, the impact of a potential data breach is reduced. That is, assuming the data is either stored in a distributed fashion or not recorded at all.
The way we think about payments will need to change as well. We are living in the Information Age, where digitisation is the new norm. However, digital payments are not always secure, and there need to be as few intermediaries in the payment chain as possible. In fact, peer-to-peer transfers would be a preferable outcome.
Bitcoin has a leg up over its competitors in this regard. The cryptocurrency is a peer-to-peer solution and protects user information from harm. Every user has an alias in the form of a wallet address, meaning no personal information is transmitted. Moreover, it is a global solution, which can not be said for other payment options.