What is a Credit Card Vault and How Do They Help Merchants?

In 2023, customer data is a double-edged sword. On the one hand, customers are more interested in where and how their data is being stored than ever before, and regulatory bodies are releasing new laws dictating how data needs to be stored every day.

On the other hand, customers loathe having to enter data twice. Some don’t even want to enter it once. From social media to digital subscription content, users have made it clear they want products that understand them, remember their interests, and make their day-to-day activities as easy and streamlined as possible. 

It’s clear that keeping today’s users happy would be a hard feat without storing and systematizing their data.

No one knows this better than merchants who process payments.

Research from Baymard showed that in 2022 the average online shopping cart abandonment rate was 69.99%. In a survey conducted by them, reasons consumers gave for abandoning a cart during checkout included; the site wanted me to create an account (24%), I didn’t trust the site with my credit card information (18%), and there weren’t enough payment methods (9%).

The trend is clear, making payments easy, trustworthy, and hassle-free for consumers will have a strong impact on a merchant’s bottom line. But how can you store credit card data and make payments seamless for consumers?

This article outlines what a credit card vault is, how it can help merchants attract and retain more customers, and how Spreedly, a payments orchestration platform, can help merchants securely handle customer data.

What is a Credit Card Vault?

A credit card vault securely stores card details. Credit card vaults commonly use tokenization to store data safely, which involves turning data into a token, which is a series of randomly generated numbers that can be used to identify the original card data.

By tokenizing cardholder data, card details, including names and card numbers, will be indecipherable to fraudsters or hackers in the case of a breach. The token cannot be used outside of the vault, making card details unassailable.

How Do Outsourced Credit Card Vaults Help Merchants?

There are several key benefits to leveraging outsourced third-party credit card vaults for merchants.

1. Securely Handle Sensitive Customer Data

With data breaches carrying fines of up to $500,000, enforced by the Payment Card Industry Security Standards Council, it’s no surprise that merchants are concerned with how to securely handle sensitive card details. Not to mention, the public perception of merchants who are outed as having had a security breach is often extremely negative, which can have a big impact on customer loyalty. Credit card vaulting is an effective way of securely handling sensitive data, helping prevent merchants from breaches and cyberattacks.

2. Reduced Payment Friction

Having to enter card data often serves as a barrier to checkout. Credit Card Vaults are the underlying technology to support digital wallets and keeping a customer's card on file in a secure way. This also makes them a great option for merchant aggregators, who can improve both the end-user experience and the merchant experience by providing their merchants with secure credit card vaulting.

3. PCI DSS Compliance

Storing or processing card data yourself makes you liable to PCI DSS compliance. Becoming PCI-compliant can be a laborious and painful process, one that requires a huge number of man-hours from your team and certification comes with a price tag of between $50,000 and $200,000 for large businesses. Not to mention, multiple failures to comply can result in merchants losing their right to process card transactions. Using a third-party credit card vault can help reduce your PCI DSS scope.

4. Seamless Subscription Management

For merchants of record, streaming platforms, and subscription-based services, storing customer data securely is crucial. When taking monthly payments, any payment frictions or failures can open you up to customers deciding to cancel their subscriptions. Credit card vaulting can help facilitate monthly subscription payments and prevent any failed transactions.

5. Enable Global Expansion   

Credit card vaults facilitate a more accessible payments ecosystem, enabling merchants to be able to access a wider range of payment gateways, including those commonly used in new geographic regions the merchant may not currently operate in. Vaulting helps merchants scale faster by connecting to the right mix of payment service providers needed to support their unique needs.

Spreedly is Taking Credit Card Vaults to the Next Level

Spreedly takes securing payment data to the next level. As Spreedly’s vice president of product management, Joseph Meuse, put it when discussing our credit card vaulting capabilities:

“What we pride ourselves on is the ability to keep your PAN in a secure environment, to enrich it with a network token, and then to intelligently decide on the merchant’s behalf which is the right solution to use under a given scenario. And we will make all that happen on our own, without the merchant having to influence that,”

We help merchants and merchant aggregators keep payment details vaulted and secure. 

Given our extensive partnerships, we’re also able to update any new payment details automatically where available. Imagine a customer gets their card stolen and orders a new card. If they have to re-enter their new details in their gym membership subscription platform for example, that might give them an opening to consider cancelling their membership instead. At Spreedly, we provide the tools to automatically update lost or stolen card details so customers don’t have to, further preventing failed payments.

Get in touch today to find out how you can activate credit card vaults, outsource many of your regulatory and security burdens, and enter new markets with our payment orchestration platform. 

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