PhonePe PG and Mastercard Partner Together to Secure Cards with Device Tokenization
4 min read
For any online business, the checkout experience plays a crucial role in driving growth. The smoother it is, the more likely customers are to complete their purchase and come back again.
Device Tokenization makes that possible. By replacing card details with secure digital tokens, it allows customers to pay with a single tap, no need to retype card numbers. The result? Faster checkouts, higher repeat purchases, and a seamless customer journey from start to finish.
But what does this mean for businesses on the other side of the transaction?
What Benefits Do Merchants Gain from Device Tokenization through PhonePe PG’s Partnership with Mastercard?
For merchants, the advantages go beyond faster payments. With Mastercard supported in Device Tokenization businesses can now cover a broader share of cardholders and drive:
Higher Conversion Rates: By removing the need to re-enter card details and allowing one-tap or biometric payments, Device Tokenization shortens and simplifies the checkout process helping more visitors complete purchases and boosting overall revenue.
Improved Customer Retention: Returning customers can pay quickly without re-entering card details, encouraging repeat purchases and reducing checkout drop-offs.
Reliable Recurring Revenue: When a customer’s card is renewed or replaced, Mastercard’s network automatically updates the associated token. This ensures subscriptions and recurring payments continue without interruption, helping businesses maintain predictable cash flow.
Operational Efficiency: Reducing the effort required to manage card data lowers administrative overhead and allows teams to focus on growth and customer engagement.
Stronger Customer Trust: Secure payment handling reduces the risk of issues, reinforcing confidence in the brand and fostering long-term loyalty.
Optimized Mobile and Digital Transactions: One-tap payments across apps and browsers improve completion rates on devices where most customers engage and transact.
Expanded Customer Base: Supporting multiple card networks allows businesses to serve a wider audience and capture more transactions.
Lower Revenue Leakage: By automatically updating tokenized cards, businesses avoid failed payments due to expired or replaced cards, protecting revenue streams.
Actionable Customer Insights: Merchants can track purchase trends and repeat behavior to guide marketing, retention, and growth strategies without compromising security.
Competitive Advantage in Customer Experience: Faster, reliable payments increase customer satisfaction, which can differentiate a business in a crowded online market.
With these benefits in mind, the next question becomes: how exactly does this function behind the scenes?
How Does Device Tokenization by PhonePe PG Work?
Customer enters card details on the PhonePe app: The card is added once by the customer within the PhonePe environment.
Token is created by the issuing bank or card network (Mastercard): PhonePe requests the token, which securely replaces the actual card number.
Token is stored on the PhonePe app: The real card number is never stored or shared. Instead, the token becomes the customer’s payment credential.
Customer provides one-time consent to link with PhonePe: This enables the saved card to appear as a payment option on merchant checkout pages.
Future transactions use the saved card: When a customer returns, they simply select their saved card (tokenized) and pay without re-entering details.
Transaction is processed using the token: The token flows through the network to complete the payment, while the actual card data remains protected.
Payment is completed with full security: Each tokenized transaction maintains the same level of security as an original card payment, ensuring trust for both merchants and customers.
For offline purchases, tap-to-pay is supported: Tokenized cards can also be used for contactless payments at POS terminals, extending the benefit beyond online commerce.
Looking Ahead
Device Tokenization delivers value for both businesses and their customers. For end-users, it’s tied to their PhonePe app and device, ensuring that only they can use it. Customers don’t have to save their card details across multiple websites or apps; a tokenized card works seamlessly across merchants. Most importantly, their actual card number remains hidden, offering stronger protection against fraud compared to storing details on merchant platforms.
For businesses, this translates into higher conversions, stronger customer retention, and enhanced trust. With Mastercard now enabled, merchants can serve a wider share of customers, reduce churn, and capture more completed transactions.
By adopting Device Tokenization and processing payments via PhonePe Payment Gateway, online merchants can future-proof their checkout experience, reduce drop offs, and create a secure, customer-first environment that directly supports growth.
