Why your payments strategy should start with the customer, not the technology.

By George Spedding (Senior Consultant) 

In payments, what customers want is clear: to pay quickly, safely, and without hassle. They don’t think in terms of “tokenisation”, “fraud vectors” or “network credentials”. They think: “Can I trust this brand?”, “Why is this checkout taking so long?” 

If your payment experience makes them pause, or indeed leave, you’re not merely creating friction, you’re losing business. 

Despite this, we still see many businesses approach payment technologies like tokenisation as the end goal, rather than a means to solve a real customer problem. In doing so, they risk investing lots of money in tools that might not deliver the value or experience needed by the user.  

In this article we want to reframe the discussion and look at tokenisation not as trend to follow, but as one of several tools to help you build payment experiences that are secure, seamless, and centred on customer trust. 

The expectation gap: what customers want vs. what they get 

We consistently see a gap between what people expect and what businesses deliver: 

• 58% of UK consumers say security is their top concern when paying online1 

• 59% feel more vulnerable online than in-store2 

• And 23% say they only shop with brands they completely trust3 

Meanwhile: 

• More than 70% of online carts are abandoned, often due to friction at checkout4 

• And by 2028, businesses could lose $91bn to online payment fraud5 

The message is here is fairly clear I hope: if you’re not offering a quick, safe, and trusted experience, your competitors will, and your customers will follow. 

Tokenisation is a powerful tool, but not a silver bullet 

Tokenisation is a great example of a technology that, when used well, helps close the expectation gap. 

It works by replacing a customer’s real card number with a unique, non-sensitive token. That token can only be mapped back to the original card by authorised parties, and can be bound to a specific merchant, device, or use case. 

Done right, tokenisation: 

• Reduces fraud and protects customers’ data 

• Improves approval rates by keeping credentials up to date 

• Lowers compliance costs and PCI burden 

• Enables frictionless experiences like card-on-file payments and digital wallets 

And there’s plenty of evidence of impact: 

• Visa says tokenised payments saved $650 million in fraud losses last year6 

• Mastercard reports 30% of its online global transactions are now tokenised7 

• Digital wallets like Apple Pay and Google Pay wouldn’t work without it 

But I want to be clear here: tokenisation is not the strategy – tokenisation is a tactic. 

It’s only valuable if it solves a real customer or business problem. And there are other tools and methods that may better suit your goals, from 3DS optimisations to biometric authentication, real-time fraud prevention, or smart routing logic. 

Don’t tokenise for tokenisation’s sake 

You should ask yourself: are we adopting tokenisation to look modern, or to create value? 

We’ve worked with banks, PSPs, and platforms that initially viewed tokenisation as a ‘compliance must-have'. But when we helped them re-framed it around the user journey, they began unlocking new benefits; higher conversion, better trust signals, fewer failed payments. 

Start with your customers then choose the tools. 

If you're looking to improve your payments strategy, here’s how to take a customer-led approach: 

1. Understand your users’ pain points 

Start with research. Map out where customers experience friction, hesitation, or drop-off, especially during checkout and payment authentication. Focus on behaviours, perceptions, and emotions - not just conversion rates. 

Ask: 

• What causes customers to abandon payment? 

• Where do they pause or lose confidence in the process? 

• Do different customer segments (e.g. by age, device, geography) have different expectations? 

2. Audit your payment stack through a customer lens 

Once you’ve identified the moments that matter, assess whether your current technology stack is helping or hurting the experience. 

Ask: 

• Are we using technologies that genuinely reduce friction, or just tick compliance boxes? 

• Are we set up to keep customer credentials secure without asking them to re-enter data? 

• Are we overly reliant on legacy systems that expose data or slow down the process? 

3. Benchmark against best-in-class experiences 

Your competitors are not just other banks or PSPs; they’re every digital business your customer interacts with. Learn from the best. 

Ask: 

• Which payment features are most common among market leaders? 

• How are they blending security and ease in a way that builds trust? 

• What technology enablers (e.g., tokenisation, biometric auth, invisible payments) are they using to differentiate? 

4. Use insight to prioritise smart investment 

Use what you’ve learned to make clear, customer-led technology decisions. Tokenisation might be the right fit, but so might smart routing, UX redesign, or new authentication flows. 

Ask: 

• Where are we spending on tech that doesn’t solve a customer problem? 

• Which improvements would deliver the biggest gains in trust, approval rates, or experience? 

• How can we test and measure impact before scaling? 

Security and simplicity aren't trade-offs anymore 

The days of choosing between strong security and a smooth experience are over. Customers expect both and they’re chosen the brands that deliver that. 

So don’t start with tokenisation. Start with the experience your customers want and work backwards from there. 

Use tools like tokenisation where they make a difference. Measure that difference. And build your strategy around what matters to your users. 

At KAE, we help financial services and payments companies connect the dots between customer expectations, market trends, and the tech choices that drive results. If you’re exploring how to sharpen your payment experience, we'd love to talk.