What is data lock-in?

Many merchants are exposed to it. However, Qualpay can protect you from its harmful effects.

What is data lock-in? It's what sometimes happens when a merchant switches to a new payments processor. All your customers' stored data remains stuck or locked in with your original processor. It doesn't automatically transfer over.

There is a perfectly understandable reason for this. It's something many merchants are unaware of. All the stored customer data associated with credit and debit cards actually belongs to the payment processor, not to you.

You can see why this can be quite problematic when switching processors. When switching processors—or combining multiple processors into a single integrated processing system—you want things to go as smoothly as possible. You don't want any interruptions in service. This includes meeting the needs of customers who have been making recurring payments.

However, when a customer's data remains with your old processor, you are left to retrieve and reconfigure all that customer information yourself. However, to retrieve the payment data, you need the processor assistance. This is not just time-consuming. It's also expensive. In fact, it's enough to ruin all the additional efficiencies and cost benefits that can be derived from switching to a new processor or consolidating your processing operations in the short-term.

The cure for data lock-in? Transferable tokens.

As some of you know, tokenization is a security process that replaces a customer's sensitive payment information with a unique, randomized identifier called a token.

Tokenization enables merchants to safely store customer card information for payments processing purposes. This is particularly helpful with recurring payments, subscriptions, or any card-on-file transactions. Thanks to tokenization, a repeat customer no longer needs to continually re-enter her card information each time she makes a transaction.

But there's a catch: these tokens usually function only within the payments processor system that created them. For the most part, they cannot be simply moved to a new processor. In other words, the customer data required for card transactions in your new processing system is stored in the old system. Possibly forever.

The second catch is found in the software you use, that references the token number stored by the processor.

However, there is a way to avoid issues triggered by this situation: if your new processor supports tokenization portability both in terms of the payment detail as well as the token number.

You don't have to live with data lock-in.

Before you choose a new payments processing provider, you should find out whether your tokenized payment data is easily transferable or if it is effectively locked in by your existing processor. Start by reviewing your contract with them before you ask your existing processing.

Always look before you leap into a new processor: does a potential new provider let you move customer data that is stored within your existing processor?

Being able to securely and efficiently orchestrate a token migration offers numerous benefits. It minimizes disruptions to your payment flows and customer experience. It ensures management of your customers' stored payment methods. And most importantly, it helps re-establish recurring billing schedules without losing data or requiring customers to update their payment information repeatedly.

Ask your Qualpay representative about how to stop data lock-in.

You know the old expression: you can't take it with you. But when it comes to tokenized data, you can. What it requires is planning and the right payments partner like Qualpay.

Qualpay's integrated platform allows merchants to maintain ownership of their data while also tracking customer payments from the initial transaction to the final deposit.

At Qualpay, we provide a seamless transition of both data and accounts into a single, efficient, and integrated processing system. So talk to us. Data lock-in doesn't have to prevent you from achieving business success.