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What are the advantages of a payment vault? For any business dealing with customer payment data, the answer is clear: fewer security risks, a simplified scope of compliance, and a smoother checkout experience for customers.
With the rise in cyberattacks and data breaches, recent forecasts estimate that global merchant losses due to online payment fraud will surpass $363 billion between 2023 and 2028, with $91 billion in losses projected for 2028 alone. Securing sensitive customer information is a necessity for every business, now more than ever. That’s where payment vaults come in.
If you own an e-commerce site, run a subscription business, or accept payments across multiple channels or platforms, understanding the core benefits of payment vaults is essential for protecting your customers and your brand.
Read on to learn everything there is to know about the advantages of payment vaults and why they’re a crucial part of scalable long-term business growth.
What is a payment vault?
Payment vaults are a central component of modern digital security, enabling businesses to safeguard sensitive customer information while enhancing checkout flows and streamlining the overall purchasing experience, particularly in online or omnichannel environments and for recurring payments.
A payment vault can be thought of as a digital safe designed to protect customer payment data. In the same way that banks keep money in a reinforced vault, businesses can keep sensitive information in a secure, encrypted storage area to protect customer data from theft, fraud, or malicious use.
In addition to the clear security advantages of payment vaults, they also facilitate faster, more streamlined checkout experiences, one-click purchases, and easy recurring payments and chargebacks, all without the associated risk and regulatory requirements of storing customer payment data directly in your merchant system.
How does a payment vault work?
Setting up a payment vault often involves partnering with a payment processor, payment service provider (PSP), or an all-in-one payment platform like Planet, which offers secure vaulting as part of its services.
When you integrate a payment vault into your merchant flows, it will look something like this:
1. A customer enters their payment details through your merchant website.
2. Payment details are encrypted and sent directly to the payment vault (not stored on your server).
3. The payment vault returns a token consisting of a unique, randomised string of characters that represents the sensitive data. This token is stored in your system rather than the actual card number.
4. When you need to charge a customer, for example, a monthly subscription or a refund, the token allows you to access the payment method and run the purchase without ever exposing or handling the raw card data.
When businesses use a payment vault, sensitive information stays locked away in a highly secure environment outside the merchant’s server. As a business owner, this reduces your risk of data breaches, lowers the scope of your compliance burden, and creates a safer and smoother payment process for your customers.
8 Advantages of a payment vault
To understand their far-reaching benefits, here are eight key advantages of payment vaults for both merchants and customers.
1. Flexibility for modern payment models
Today’s shoppers expect more ways to pay: card (obviously), mobile wallets, one-click checkouts, in-app purchases, and beyond. As a merchant, it’s in your best interest to support multiple payment methods to meet customer demand, and a payment vault gives you the flexibility to do so.
A payment vault makes it easy to support diverse, frictionless payment options while also ensuring strong security and regulatory compliance.
Examples:
- Subscription businesses can auto-renew without asking customers to enter their details each time.
- E-commerce stores can enable one-click checkout to increase conversions.
- Omnichannel retailers ensure stored payment methods work across web, mobile, and in-store shopping environments.
2. Streamlined PCI DSS compliance
The more customer data you store in your merchant systems, the higher your PCI DSS compliance burden will be (along with the associated costs of meeting the stringent requirements).
Payment vaults can drastically minimise your scope of compliance by ensuring sensitive customer information is stored securely off your servers. When you do need to work with payment data to run charges, it’s in a tokenized form to prevent exposing the actual card number.
All in all, one of the most significant advantages of payment vaults is a much lower risk of audit failures or non-compliance penalties related to PCI DSS.
3. Stronger protection against data breaches
As a merchant, you can significantly reduce your risk of data breaches by using a payment vault. By storing customer payment details in an encrypted environment that’s completely separate from your internal merchant server, you leave very little information susceptible to fraud or theft.
If a breach does occur on your side, only tokens are exposed (rather than card numbers), which are useless to bad actors. This drastically reduces your surface area for attack, protects your customers, and upholds your brand’s reputation. Because it’s a no-brainer that consumers are more likely to shop with merchants who keep their information safe.
4. Easily facilitates recurrent payments
Payment vaults are a fundamental for automating recurring payments, which are the backbone of business models like subscriptions, memberships, and instalment plans.
Instead of manually keying in card details for every recurring transaction, a customer inputs their information once, which is then securely stored in a payment vault isolated from your merchant systems. When it’s time to charge the customer, let’s say on a monthly basis, a token enables your payment processor to securely complete the transaction. There’s no need for the customer to re-enter their details for the card to be charged.
This reduces churn from failed or expired payment methods, simplifies the customer experience, and keeps sensitive card data out of your merchant environment, significantly lowering your data exposure risk related to recurrent payments.
5. Simplifies chargebacks and refunds
Refunds and chargebacks are an inevitable part of doing business, but with a payment vault, they become easier to manage. Customer payment details are stored securely off your systems, and Tokenization lets your payment processor reference the original payment method for fast and accurate refunds without exposing raw card numbers.
This ultimately cuts down on administrative hurdles and drives a smoother experience in the event of chargebacks.
6. Drives long-term customer loyalty
When you make payments smooth, secure, and easy, customers are more likely to come back. Payment vaults go beyond protecting your business and actually help foster trust and loyalty by safeguarding customer information and enabling a frictionless checkout experience.
In addition to the obvious security advantages, payment vaults simplify repeat purchases, subscriptions, and one-click transactions, all of which encourage customers to stick with your brand rather than shopping around.
There’s a reason why millions of people order from Amazon every day, and it’s not just about the products. It has more to do with the secure and effortless checkout experience guaranteed with each order.
Leading global brands use Tokenization and secure credential storage to create a strong sense of convenience and confidence for their customers. Payment vaults often play a large role in this, helping you, as a merchant, deliver the same level of trust and flexibility to your own consumers.
7. Future-proof payment security
The payment landscape is continually evolving, as are the related technologies, regulations, and security threats.
Unfortunately, clunky payment infrastructure doesn’t cut it anymore if you want to stay ahead of data breaches and compliance requirements as a merchant.
A major advantage of payment vaults is that providers proactively update their infrastructure to meet evolving security standards such as PCI DSS and PSD2, while also adapting to new technologies like mobile payments and digital wallets.
Overall, implementing a payment vault is a step towards future-proofing your business since it protects you against the constant need for costly system overhauls every few years to keep up with evolving standards and regulations.
8. Built to scale with your business
As your business grows with more customers, higher transaction volumes, and expansion into international markets, you’ll want payment infrastructure that can keep up.
Payment vaults are designed for scale by:
- Supporting millions of stored payment methods securely
- Enabling global transactions with localised payment methods (again, stored safely)
- Operating at an enterprise level
By implementing a payment vault, merchants of any size are laying the groundwork for scalable growth that works across borders.
Is a payment vault right for your business?
If your business stores customer payment details, offers recurring billing, or aims to provide an effortless checkout experience, investing in a payment vault can accomplish these and more. By cutting sensitive payment information out of your systems, you greatly reduce risk, simplify the compliance process, and power the seamless experience that modern consumers expect.
Whether you’re running an e-commerce website, managing subscriptions, or expanding across borders, a payment vault is the ultimate solution to futureproofing your payment infrastructure while protecting your brand.
Final thoughts about the benefits of payment vaults
The advantages of payment vaults extend to all industries and business sizes. It helps to think of payment vaults as the foundation of modern payment infrastructure, designed for scalable, secure, and customer-friendly growth. From reducing your compliance burden to building long-term loyalty with your customers, the advantages of payment vaults cover every stage of the customer journey.
The bottom line is that the future of payments is secure, convenient, and frictionless. Payment vaults are an essential part of that evolution.
Integrate Planet’s payment vault into your business operations today
Planet’s secure vaulting solutions enable businesses of all sizes to safeguard customer payment data, reduce complexities surrounding PCI DSS compliance, and deliver a streamlined payment experience across every channel.
With global capabilities, built-in support for modern payment methods, and no vendor lock-ins, we’re ready to help you maximise security and growth.
Start offering smooth, secure payments today
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