Monitoring Secure Transaction Volume in Peacock


Grace Greenwood

Community Knowledge Lead

December 11, 2023

December 11, 2023

December 11, 2023

In the ever-evolving landscape of digital transactions, staying ahead of the curve is not just an advantage, it's a necessity. Pagos can help you stay a step ahead with expertly designed tools for monitoring, analyzing, and acting on payments optimization strategies. In this blog post, we’ll dig into two payment technologies aimed at increasing payment security for all—network tokenization and 3D Secure (3DS)—and how Pagos can not only assist you in keeping transactions secure, but monitoring that secure transaction volume closely.

Using Network Tokens

A network token is a payment credential specific to a card-merchant pair and used as a substitute for a card’s primary account number (PAN). It replaces the card number with a unique, card brand-issued digital token—in this case, a random string of characters—that isn’t directly linked to the customer’s card number and can only be used in specific contexts. This token is designed to enhance the security of digital and card-not-present transactions, such as online and mobile payments. Some benefits of using network tokens are:

  • Increased authorization rates - If the underlying PAN associated with a network token changes or expires, the token will remain current and usable. This reduces the number of charges declined due to outdated credentials, thus increasing issuer approval rates by around 2-7%—particularly on frequently used cards (e.g., subscription payments). 

  • Reduced involuntary churn - Because network tokens always contain updated card information, they eliminate involuntary churn caused by the expiration of stored credentials, lost cards and even some do not honor declines.

  • Reduced fraud - A network token is tied to both the single PAN it obfuscates and the merchant processing the transaction, thus reducing the possibility of fraud.

  • Reduced costs - Network tokens help reduce risk and therefore, reduce interchange fees in a number of countries—especially for businesses on custom interchange pricing. In the United States, for example, qualified card types (Consumer cards) and businesses (non-high risk MCCs) attract a 0.09% lower interchange rate on Visa cards for transactions processed with a network token. For a merchant processing USD $100 million in recurring or card-on-file sales on consumer cards, 0.09% is $90K in cost savings!

All the benefits listed above are strong reasons for businesses to make extensive use of network tokens. If you aren’t using them already or are looking for a global, processor-agnostic network tokenization tool, look no further than Toucan by Pagos!

Sign Up for Toucan!

Tracking Your Use of Network Tokens

Once you start using network tokens, you’ll want to track their usage to ensure you’re experiencing those benefits listed above. This is where Peacock by Pagos, our data aggregation and visualization tool, comes in! We have designed a new chart specifically to shed some light on the proportion of your processed transaction volume that’s made with network tokens versus primary account numbers (PANs), and the approval rate of these individual segments. You can find this new chart in the Card Brand standard dashboard of your Peacock Service Panel”:

By reviewing the Network Token vs. PAN chart, you can identify and closely monitor the different approval rates associated with the different payment credentials (NTs vs. PAN), and understand the impact that tokenisation can have on your business.

Processing 3D Secure Transactions

3D Secure (3DS) is a messaging protocol developed by EMVCo that enables consumers to authenticate themselves with their card issuer when making ecommerce purchases. When processing 3DS transactions, businesses typically direct customers to an authentication page on their bank’s website where they’ll enter a password associated with the card or a code sent to their phone. This additional security layer helps prevent unauthorized card-not-present transactions and protects the merchant against fraud. Customers know this process by the card networks’ brand names, such as Visa Secure and Mastercard Identity Check.

Monitoring Your 3DS Transaction Volume

In Peacock by Pagos, we offer an entire dashboard specifically for 3DS transactions, with charts demonstrating the frequency by which you employ 3DS, the approval rate of 3DS transactions, and the response code breakdown for those that get declined. With this data, you can confirm your 3DS implementation is running as expected to reduce fraud without blocking legitimate transactions unnecessarily. It’s becoming increasingly important to monitor this data over time, as banks and governing bodies frequently change the rules around 3D Secure processing; to avoid authentication errors or the costs associated with fraud chargebacks, your setup must keep up accordingly.

Peacock’s New CIT 3DS Transactions Chart

In the 3DS dashboard, we’ve just released a new chart, titled CIT 3DS Transactions, which breaks down your customer-initiated transaction volume by whether or not it was 3DS-attempted. Before we get into the value of this chart, let’s quickly review a few payments concepts at play here. Customer-initiated transactions (CITs) are those that occur with the buyer present during the transaction. Conversely, merchant-initiated transactions (MITs) are those made by a merchant without the customer being actively involved at the time of sale. On the back end, we can identify transactions as having been customer-initiated if the stored credential used in the transaction is either one-time, recurring-first, or card-on-file-vault. 3DS checks can only be performed on customer-initiated transactions, because the process of authenticating the payment method inherently requires customer involvement.

Ok, back to the new chart in Peacock! We built the CIT 3DS Transactions chart to show you what percentage of your customer-initiated transactions are going through 3DS authentication. By sorting out merchant-initiated transactions, this chart only shows the data that matters most when it comes to assessing your 3DS transaction volume. From there, you can confirm that your 3DS share matches what you’d expect given your overall 3DS strategy—regardless of whether that strategy is designed around regulatory requirements (Europe) or to maximize your fraud liability shift to the card issuers. For example, in a market like Denmark, you’ll want to make sure all your customer-initiated credit and debit card transactions are processed with 3DS.

Join Us

In the ever-evolving world of digital payments, staying secure means keeping up with the latest and greatest in payments tech. Network tokens and 3D Secure (3DS) are at the forefront, promising both heightened security and efficiency. The adoption of network tokens presents many advantages, from increased authorization rates and reduced involuntary churn to lower fraud rates and overall cost savings. Furthermore, the incorporation of 3D Secure adds an additional layer of protection, empowering businesses to combat unauthorized card-not-present transactions and mitigate fraud risks. Peacock by Pagos offers indispensable resources for businesses to monitor and optimize their usage of network tokens and 3DS transactions. Get started with us today!

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