Vaulting customer card data is an essential part of the payments flow of any fast-growing business. The advantages of having a tokenized vault are common knowledge among many payments teams, but traditionally these cards have been vaulted with a single gateway.
Many merchants are now realizing the value of a standalone credit card vault, enabling transactions with multiple payment gateways as they expand into new markets and geographies.
What are the advantages of taking this approach? In this post, we’ll explore the reasons you would want to have an independent vault.
One of the alternatives to a universal, standalone credit card vault is storing cards yourself. Storing cards yourself means taking on full PCI DSS compliance scope. An in-house solution secures the benefits of universal tokenization to enable a multi-provider payments ecosystem. It is the ideal solution for the large enterprise with extensive resources to manage its own payments ecosystem from head to toe.
The infrastructure and certification costs associated with PCI DSS compliance, starting at over $50,000 per year and requiring ongoing effort from dedicated personnel, are prohibitive for most businesses concerned with expanding quickly.
Alternatively, in order to reduce PCI DSS scope, most merchants decide to vault cards at their payment gateway.
The most common end-to-end payment solution, storing cards at a gateway works well for small businesses that do not need to transact across multiple gateways. A single provider can conveniently handle all of your tokenization and payment processing needs. However, with the growth of eCommerce more merchants are experiencing a need for a multi-provider ecosystem, as I recently covered in the Advantages of Integrating with Multiple Payment Gateways.
Cards stored in a gateway vault are essentially locked into that provider, making it difficult to move card data and negotiate rates. This can produce frustration as businesses grow and expand into new geographies, as they attempt to migrate and expand their payment network to new providers.
The perfect compromise to the previously mentioned scenarios is having a standalone card vault. A universal, standalone credit card vault avoids the costs of PCI DSS compliance and enables a multi-provider payments ecosystem.
In today’s eCommerce landscape, most merchants are looking to offload PCI DSS scope to the fullest extent possible. Maintaining infrastructure and managing recurring audits does not scale easily in modern SaaS businesses, and most companies have chosen to outsource vaulting credit cards to third-parties with expertise in the area.
For fast growing merchants anticipating geographic expansion, payment method portability via a standalone credit card vault enables the use of stored payment methods at any gateway that the provider is able to reach via integration. As a business expands into new markets, sending card data via additional gateways become necessary, but there are also other advantages to payment method portability.
Merchants processing large volumes of payments need redundancy and resiliency in their payment processing systems, to ensure unavailability does not result in failed transactions. A single-threaded gateway connection for both storing credit cards and processing transactions could result in a large loss of revenue.
For online platforms and marketplaces who aim to attract merchants to their service, a single-provider solution creates excessive friction for on-boarding. Requiring merchants to onboard with only one, or a small handful of gateways in order to participate makes using the platform less attractive. Platforms that are able to connect on-demand with all of their merchants’ payment gateways, but also offer credit card vaulting as a service, are more attractive to potential customers.
Whether you’re a merchant looking to fuel growth in a multi-provider payments ecosystem, or a platform supporting your merchants’ payment needs, a standalone credit card vault is the best solution to avoid costs of PCI DSS compliance and lock-in with a single provider.
Spreedly provides a universal tokenization solution, a standalone credit card vault capable of connecting to every major payment gateway across the globe.