Variable Recurring Payment (VRP)
In broader fintech and blockchain contexts, tokenisation also refers to the digital representation of assets – whether fungible (interchangeable, like currency) or non-fungible (unique, like NFTs) – on a distributed ledger. While not directly equivalent to payment tokenisation, both forms share the principle of substituting sensitive or valuable information with secure digital tokens. As financial services evolve, there is increasing convergence between traditional payment tokenisation and blockchain-based asset tokenisation, especially in areas like decentralised finance (DeFi) and programmable payments.
Applications
E-commerce:
Reduces fraud in online card payments by verifying the cardholder's identity
E-commerce:
Reduces fraud in online card payments by verifying the cardholder's identity
Advantages
- Enhanced security: Reduces unauthorised transactions by verifying that the genuine account holder is authorising the payment
- Enhanced security: Reduces unauthorised transactions by verifying that the genuine account holder is authorising the payment
Challenges
- User Experience: Additional authentication steps can cause friction and increase checkout abandonment
- User Experience: Additional authentication steps can cause friction and increase checkout abandonment
