Payments Essentials: Payments Orchestration & Tokenization

This post was originally published on 02/08/2023 and has been updated to reflect the most current statistics and information.

Delivering an exceptional customer experience is crucial for merchants and merchant aggregators, yet achieving this is often hindered by a poor checkout experience.

For any digitally-based business, a major challenge to optimizing the checkout process is finding the right way to securely store a customer's payment information. It's also vital to establish a system that automatically alerts you of out-of-date payment details and updates them on your behalf.

The solution to this challenge lies in payment tokenization and vaulting.

Around the world, tokenization and orchestration keep growing in popularity. According to Mordor Intelligence, the payment orchestration platform market is worth $3.13 billion in 2026 and is projected to reach $7.27 billion by 2031, growing at a compound annual rate of 18.31%.

Key drivers of this growth include the rise of alternative payment methods, especially mobile wallets, growing adoption of tokenization across retail and eCommerce, and rising demand for payment data security as digital commerce keeps expanding.

For merchants and merchant aggregators, the key to implementing tokenization may just come down to finding the right payment orchestration and vaulting solution.

What are Tokenization & Vaulting?

Tokenization, in the context of payments, is the process of replacing a customer's actual payment information with a unique token. These tokens have their own identifying codes that represent the customer's payment data, such as a card number, offering greater overall security.

For tokenization to be effective, a customer's payment information must be up-to-date and accurate, leading us to the next two critical pieces of the payment puzzle: vaulting and account updating.

When storing customer payment information, the ideal way to do so is through a payment vault.

Vaults are solutions for storing card numbers and other payment information that eliminate the burden of regulatory PCI compliance thanks to being managed by a third-party service provider. 

Rather than storing cards yourself, a standalone vault solution enables you to increase business flexibility and integrate any payment gateway or other payment service needed.

Alternatively, you can use a vault offered by a specific payment gateway. However, gateway vaults make it near-impossible to utilize other payment service providers, limiting your overall payment flexibility.

This also means that you are limited in your portability. You may wish to have the flexibility to move your vault between payment services when your strategy and vendor needs change.

Additionally, for many merchants and merchant aggregators/platforms, especially those that rely on recurring payments, there is value in having payment information up-to-date. This requires you to have a system in place for regularly updating and refreshing a customer's payment data in your payment vault.

As the article Spreedly Solutions Stack: Keep Customers Transacting puts it:

"Accurate and current card data keeps transactions flowing and your customers happy, but stored cards are regularly canceled or expired and that disrupts your ability to transact with the cards that are stored in your vault, and that hurts customer relationships and also can negatively impact your overall revenue."

The vital solution to this challenge is the implementation of an account updating tool. Account updating is the process of automatically updating and refreshing payment information. 

For example, Spreedly's Account Updater regularly submits all of your stored Visa, Mastercard, and Discover card information to confirm the information is still accurate. As this feature is automated, there is no additional work required on your behalf to keep tokens up-to-date.

Why Payments Orchestration is Vital for Tokenization & Vaulting

To make the most out of tokenization, merchants and merchant aggregators need a solution that simplifies the process of creating network tokens while also providing easy access to a standalone vault.

Orchestration is an approach to payments that unifies your payment technology stack. When selecting an orchestration provider, you have two options to choose from: agnostic providers and augmented providers. Augmented payment orchestration is typically offered by one specific payment service provider, allowing you to work exclusively with their products and services.

By contrast, agnostic payment orchestration enables you to work with a much wider selection of payment service providers, allowing you to build a more robust payment infrastructure.

Additionally, agnostic orchestration gives you the ability to store payment data in a universal vault that can be easily accessed through secure integrations of virtually any payment service. You should also seek out a payment orchestration provider that offers account updating tools to ensure your revenue is maximized and the checkout experience is as seamless and secure as possible.

That same agnostic approach is now extending to agentic commerce, where AI agents initiate 

purchases on a customer's behalf. A token that isn't locked to one gateway is what lets that transaction route and settle the same way a human-initiated one does.

Overall, payment orchestration provides you with the essential solution you need for not just tokenization but also vaulting and account updating.

Future-Proof Your Payment Data with Spreedly

At Spreedly, our Payments Orchestration solution provides you with everything you need to establish a resilient payment system.

Along with our network tokenization and Account Updater tools, Spreedly offers an agnostic approach to payment orchestration that helps you find the right mix of payment services (including payment gateways and fraud prevention tools) to fit your business needs. Network tokenization in particular replaces a card number with a token issued directly by the card networks, which can improve authorization rates on top of standard tokenization's security benefits.

Our global payment ecosystem gives you access to 150+ payment services across 100+ countries, all leveraged via a single API. Plus, Spreedly's PCI-compliant vault is portable, allowing you to connect your network and PAN tokens to the ideal payment service with ease.

As you work to expand your business, Spreedly scales with you, providing the expert payment support you need to take advantage of new markets and drive revenue like never before.