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Why tokenization is the new industry standard in payments

Online supermarket, Picnic might be one of the first Dutch merchants to offer a one-click payment method to its consumers following the confirmation of launching their own payments solution in collaboration with Mastercard, Rabobank and Adyen. So today, we’ll talk about Mastercard’s tokenization role in this one click eCommerce payment method, and why this is a huge leap forward towards boosting the checkout experience.

Why Picnic’s one-click checkout payments solution in collaboration with Rabobank, Adyen and Mastercard of Significance

In short, having a long or complicated checkout process is the reason why over a fourth of shoppers abandon their cart. And in total, 55% of eCommerce shoppers will abandon their cart if they have to re-enter their credit card or shipping Information. 

reasons for abandonments during checkout
Why shoppers abandon their cart. source: Baymard Institute.

Mastercard’s Network tokenization in the one-click payment method

Tokenization is a very hot topic in the payments landscape as it is key to minimizing friction and thus boosting checkout optimization, which is crucial to ecommerce merchants.

Tokenization allows merchants to store the token instead of the PAN, and can add restrictions which limits it to only be used at the merchant to whom the token was issued. 

Additionally, if a token is stolen, Mastercard can simply issue a new one. This extra layer of security is very welcome, especially at a time where ecommerce spend has massively increased as opposed to card present payments.

Adyen and Rabobank's roles in facilitating one-click payments

This pilot is only available for consumers that hold a Rabobank account. Rabobank is the issuer in this collaboration whilst Adyen on the other hand, is the acquirer

Online payments architecture in the Netherlands

how are online purchases paid in the Netherlands?
Most used payments methods in the Netherlands

Unlike many different markets, credit card penetration rates in the Netherlands are low, and debit cards don’t display the 16-digit PAN on the card as it is hidden in the chip. Therefore these debit cards can not be used for eCommerce transactions. The most common way to pay is through payments pioneer iDeal. Ideal requires you to select your bank from a provided list, and redirects you to the bank application. Therefore iDeal payments always have a 3DS flow. 

Altogether, the platform iDeal is definitely ideal for many merchants because of its low cost and convenience. That being said, it does produce friction as consumers are redirected to their own banking platform. 

It is worth mentioning that this once-click checkout method is not limited to picnic and there are a lot of merchants that can benefit from it. So even though Picnic started out first, other merchants will follow later this year.


Finally, this initiative is very promising for the future of online payment in the Netherlands, but one may start to wonder whether this new payment method could shake up the Dutch Payments Landscape & Online Payment Preference.

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