Unlocking the Potential of Network Tokens Through Payment Orchestration

Doug Fry, Product Manager, Spreedly.
Dec 14, 2023

In the dynamic realm of digital transactions, payment orchestration emerges as a key player, streamlining the complex interplay of various payment processes. At the heart of this orchestration lies the innovative use of network tokens, a technology that is transforming the security and efficiency of online payments. This blog will explore the critical role of network tokens within payment orchestration and how Spreedly can enable them by highlighting their value, evolution, and the returns they offer in the modern payment ecosystem.

The Value of the Vault

A 3rd party vault in payment orchestration is more than just a secure storage space; it's a foundational component that enables efficient and safe transactions. Integrating network tokens into the vault brings a multitude of benefits, enhancing the overall payment process. Spreedly  quantifies  the value of the vault using the equation:

Vault Value=((Recurring Index–1)×Average Ticket Size)×UPMs

Vault Value=((Recurring Index–1)×Average Ticket Size)×UPMs

  • Example A: With 1M Revenue Transactions, 100K UPMs (Unique Payment Methods), and a $10 Average Ticket Size, the calculation would be ((1,000,000 / 100,000 - 1) \times 10) \times 100,000 = $9,000,000.
  • Example B: With 1M Revenue Transactions, 500K UPMs, and a $10 Average Ticket Size, the value of the vault would be ((1,000,000 / 500,000 - 1) \times 10) \times 100,000 = $5,000,000.

Maintain Ownership and Control

Owning and controlling the data within the vault is paramount. Network tokens empower merchants with this control, allowing them to manage customer information securely and effectively. This control translates into tangible value, as seen in Example A, where optimized Recurring Index and UPMs significantly increase the vault's value.

Ensure its Protection

The security of Spreedly’s vault, enhanced by network tokens, protects sensitive customer data, thereby protecting the vault's value. In Example B, the difference in UPMs directly affects the vault's overall value, highlighting the importance of security in maintaining and enhancing the vault's worth.

Slow its Depreciation

Network tokens help maintain the data's relevance over time, thereby slowing its depreciation. This aspect directly impacts the Recurring Index, influencing the overall value of the vault as demonstrated in the examples.

Make Improvements

The integration of network tokens in the vault allows for continuous improvements, reflected in the potential increase in UPMs and the Average Ticket Size, leading to an enhanced vault value.


Evolution of Tokenization and Vaulting

Tokenization in the payment industry has evolved dramatically from its early days in the 2000s. Initially focused on basic security and PCI compliance, it often lacked flexibility and full data ownership for merchants. Today, it has transformed into a more agnostic, comprehensive approach, supporting lifecycle management, enhancing payment strategies, and offering rich data management, aligning with the sophisticated needs of modern payment processing.

The Past of Tokenization

In the early 2000s, tokenization was primarily offered by Payment Service Providers (PSPs) or managed in-house. These solutions were designed to be PCI compliant, but they often did not assure full ownership of data to the merchants. Options for managing tokenized data were limited, and the focus was predominantly on meeting basic security requirements rather than enhancing the payment process.

The Present of Tokenization

Today, tokenization has evolved to become more agnostic, supporting lifecycle management and enabling a more robust payments strategy. Modern solutions are data-rich and compliant, supporting network tokens and offering a wide range of management options. This evolution reflects the growing need for more sophisticated payment solutions that not only secure data but also contribute to the overall efficiency and strategy of payment processes.

Why Investing In Tokenization Is A Necessity

Investing in the right technologies and compliance standards is essential for harnessing the full potential of network tokens in payment orchestration. These investments not only secure transactions but also ensure seamless integration and operational efficiency.

Token Service Integrations

Integrating token services is essential for leveraging the capabilities of network tokens, ensuring seamless and secure transactions across various payment platforms. These integrations also facilitate interoperability between different payment systems, enhancing the flexibility and reach of a merchant's payment infrastructure. Additionally, robust token service integrations contribute to a more streamlined user experience, reducing transaction friction and boosting customer satisfaction.

PCI Compliance

Investing in PCI Compliance is non-negotiable. It not only secures transactions but also establishes a business’s credibility in handling customer data responsibly. Adherence to PCI standards is crucial for protecting payment data and maintaining consumer trust, especially in an era where data breaches are increasingly common.

BIN Service

Utilizing Bank Identification Number (BIN) services is crucial for managing network tokens efficiently, thereby streamlining payment processes and enhancing security. BIN services play a critical role in identifying and validating transaction details, ensuring the smooth processing of payments and minimizing the risk of fraud.


Ongoing maintenance of the tokenization system is a critical investment. It ensures that the network tokens adapt to changing payment landscapes and continue to operate effectively. Regular updates and maintenance are essential for staying ahead of emerging security threats and ensuring compliance with evolving industry standards.

The Potential Returns Of Vaulting and Tokenization

The investment in network tokens and payment orchestration yields significant returns, impacting various aspects of the payment process. We can quantify these returns using the equation:

(Value of Failures×(Actual–Benchmark)+Processing Savings)=Return

(Value of Failures×(Actual–Benchmark)+Processing Savings)=Return


General Decline

A notable return is the decrease in general transaction declines. Network tokens improve data accuracy, leading to higher transaction approval rates. This reduction in declines not only enhances customer satisfaction but also boosts revenue by ensuring more successful transactions, as highlighted in our returns equation.


The risk of transactions involving lost, stolen, or invalid cards is significantly reduced with network tokens, thanks to their dynamic nature that allows for quick updates or revocations. This adaptability not only reduces fraud but also minimizes disruptions in the customer's purchasing journey, maintaining a smooth transaction flow and positively impacting the 'Value of Failures' component in our return calculation.


Reducing reliance on CVV codes for transaction security is another benefit of network tokens, enhancing the safety of card-not-present transactions. This shift towards token-based security measures provides a more robust defense against fraud, particularly in online and mobile commerce environments, and is reflected in the reduced 'Actual' failure rate in our returns formula.

Insufficient Funds

Network tokens aid in accurate real-time transaction validations, thereby decreasing the occurrences of declines due to insufficient funds. This accuracy ensures a smoother transaction process, reducing customer frustration and enhancing the overall user experience, thereby contributing to the 'Processing Savings' in our returns equation.

A Strategic Step Towards a Secure Digital Future

Payments Orchestration offers a secure, efficient, and customer-centric approach to card not present transactions. With the ability to integrate network tokens into the payment ecosystem, a strategic move towards a more secure, seamless, and adaptive digital commerce future. The investment in network tokenization is a step towards redefining the efficiency and security of online transactions.



About Us

Spreedly's Payments Orchestration platform enables and optimizes digital transactions with the world’s most complete payment services marketplace. Built on Spreedly’s PCI-compliant architecture, our Advanced Vault solution combines a modern feature-set with rule-based configurations to optimize the vaulting experience for all stored payment methods. Global enterprises and hyper-growth companies grow their digital business faster by relying on our payments platform. Hundreds of customers worldwide secure card data in our PCI-compliant vault and use tokenized card data to enable and optimize over $45 billion of annual transaction volumes with any payment service. Spreedly is headquartered in downtown Durham, NC.

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