What is Device Tokenization, and How Does It Work?

Device Tokenization is a payment solution that replaces a user’s card details with a secure, device-linked token when the card is saved on a phone, tablet, or computer to enable faster, frictionless checkouts by allowing returning users to pay without re-entering their card information.

Note: What are Device Tokens?
Device tokens are the unique, encrypted codes issued as part of this solution. They represent the original card number but are only usable on the specific device and platform they were created for, helping to streamline payments while keeping card data protected.

Why is There a Need for Device Tokenization?

As digital commerce accelerates, user expectations around speed and convenience have become a key driver of conversion performance. Traditional checkout flows, especially those requiring manual card entry create unnecessary friction, directly impacting revenue.

Device tokenization enables users to save their payment credentials securely on their personal devices as tokens, supporting faster checkouts without re-entering card details, reducing transaction time and supporting higher purchase completion rates.

With over 70% of mobile carts abandoned, primarily due to friction at checkout, optimizing the payment experience is now a commercial priority.

For businesses, Device Tokenization is not just a functional enhancement, it’s a strategic investment in revenue growth, user retention, and future-readiness in a market moving rapidly toward device-native transactions.

Now, while Card-on-File Tokenization has improved payment security and convenience, the industry now demands for more. Both Device Tokenization and Card-on-File Tokenization enable faster and secure payments, but they serve different purposes. Here’s how:

How is Device Tokenization Different from Card-on-File Tokenization

Criteria	Device Tokenization	Card-on-file Tokenization
Where Token is Stored	Token is stored securely on the user’s device (e.g., PhonePe).	Token is stored securely on the merchant’s portal or payment processor.
How It Works	A unique token is created and stored on the device, replacing the card number for transactions.	Token is generated by the card network when a card is saved with a merchant replacing the card number for future transactions.
Usage Scope	Works across multiple merchants on the same device, providing convenience for repeat purchases.	Primarily works with the specific merchant or platform where the card was saved.
Security Model	Token is tied to the device, preventing unauthorized use on other devices or platforms.	Token is tied to the merchant, ensuring that card details are never exposed to third parties.
User Experience	Users can pay instantly on any supported app or website from the same device, with minimal friction.	Users can check out on the specific merchant’s site without re-entering card details.

Top 5 Advantages of Device Tokenization by PhonePe PG Bolt for Your Online Business

Device tokenization simplifies payments, speeds up transactions, and builds trust with your Users. Here’s how it delivers real value to your business.

1. Safer Payments for Users

Device Tokenization replaces real card details with a secure digital token linked to a user’s device, reducing fraud risks.

Why it matters for your business:

• Protects users’ payment data even if your platform is compromised.
• Prevents unauthorized transactions, tokens won’t work on another device.
• Builds user trust with a safer way to pay.

2. Faster and Easier Checkout

With Device Tokenization, users don’t need to enter card details for every purchase, making transactions quicker.

How does this help your business?

• Reduces checkout time, leading to fewer abandoned carts.
• Supports one-click payments without manually entering details.
• In some cases, CVV entry is not required, depending on the bank.

3. Works Across Multiple Merchants

Unlike traditional card storage like (COFT), Device Tokenized cards work on different platforms without needing to be saved separately. 

Why is this useful for your business?

• If a user has saved a card via device tokenization (e.g., on PhonePe), they can complete purchases on your platform without re-entering card details.
• This reduces checkout friction, especially for first-time users, and increases the likelihood of conversion.
• No need to manage or store card data, lowering compliance and security burdens for your platform.

4. Supports Different Checkout Methods

Device Tokenization works with various payment flows, making it flexible for businesses.

What this means for your platform:

• Available on Standard Checkout flows (web, app, embedded forms) as well as PhonePe PG Bolt.
• With PhonePe PG Bolt, merchants can retrieve and use device-tokenized cards directly from the user’s device, enabling fast, secure, saved-card experiences.
• Because tokens are device-bound, they’re safe to use in saved-card flows without requiring additional card entry or storage.

Final Thoughts

Device Tokenization is no longer a future concept; it’s a present-day advantage for businesses looking to stay ahead in a competitive digital commerce landscape. With rising expectations and shrinking attention spans, businesses that adopt Device Tokenization are better positioned to improve conversion rates, reduce drop-offs, and build long-term customer trust.

Every time a customer pays through the PhonePe Payment Gateway via Device Tokenization, it quietly works in the background to safeguard their data while ensuring a faster, more seamless checkout experience. With Device Tokenization on PhonePe PG Bolt, businesses can instantly connect with over 600 million PhonePe users, broadening their reach and effortlessly increasing transaction volumes. It’s a smart, secure, and scalable solution that brings together convenience and protection giving your customers a future-ready payment experience.