In the UK collections industry, security, efficiency, and customer trust are essential. As digital payments become the norm, financial service companies face a unique set of challenges, including managing recurring payments securely, reducing operational costs, and minimising fraud risks. One technology proving highly valuable in this landscape is network tokenisation – the replacement of traditional card details with unique, merchant-specific digital tokens. But how exactly are network tokens helping UK collections?

Enhancing secuirty and reducing fraud

For a sector handling sensitive financial information daily, security is a non-negotiable priority. Network tokens allow lenders to store a secure token rather than the Primary Account Number (PAN) of a consumer’s card, reducing the risk of exposure in the event of a data breach. This system makes network tokens virtually useless to anyone outside of a specific merchant environment, providing an added layer of fraud protection. In 2023, UK Finance reported that £1.17 billion was stolen through unauthorised and authorised fraud, highlighting the critical need for enhanced security measures.

Boosting authorisation rates & improving cash flow

A primary challenge for lenders is maintaining high authorisation rates, especially with recurring payments. With traditional card-on-file payments, expired or reissued cards can lead to disruptions, resulting in payment failures and increased collections costs.

Network tokens, however, can be dynamically updated. When a card is replaced, the associated token is automatically updated, reducing failed payments. In fact, Acquired.com has observed a notable improvement in success rates of recurring payments with the implementation of network tokens, with some customers seeing up to a 4% uplift in success rates (Source: Acquired.com Hub).

In the UK, failed payments contribute to significant revenue losses annually, especially within industries reliant on recurring payments, such as lenders. By adopting network tokenisation, lenders can avoid disruptions, ensuring more payments go through on time. This boosts success rates, helping to stabilise cash flow and making the entire collection process more efficient.

Reducing operational costs

Another advantage of network tokens in collections is their cost-saving potential. Network tokens streamline payment processing, reducing the need for manual card detail updates and, consequently, lowering administrative burdens. This is especially beneficial for lenders handling large volumes of accounts, where the costs associated with payment processing and transaction management can be significant. Additionally, many card networks impose higher fees for non-tokenised transactions, meaning network tokenisation could reduce transaction fees over time.

Simplifying customer experience

A seamless experience is essential for reducing friction in the collections process. Network tokens enable smooth payment continuity without the need for customers to re-enter details if a card is lost or expires. This automatic update capability reduces churn, improves customer satisfaction, and allows lenders to maintain continuous payment schedules with minimal disruption.

A future-forward solution for collections

The utilisation of network tokens in the UK collections industry marks a key step forward. With better security, higher authorisation rates, reduced costs, and a frictionless customer experience, network tokens empower agencies to improve efficiency and meet increasing regulatory and consumer demands. As the industry moves towards digital-first solutions, adopting network tokenisation isn’t just a smart choice—it’s a necessary evolution to stay competitive.

For lenders and other businesses processing recurring card transactions, network tokens represent a powerful and practical solution in the modern UK payments landscape.