Spreedly Explains Why Tokenization Is Fintech’s Control Layer
Tokenisation is emerging as a central control layer for fintech companies rather than a simple security background measure. As payment ecosystems grow more complex, businesses are shifting their focus to owning tokens and using them for portability and performance. Doug Fry, Senior Product Manager at Spreedly, says this shift is driving the renewed importance of the technology.
For merchants facing vendor lock-in and strict compliance rules, the ability to move payment tokens is becoming essential for scaling. Doug explains that tokenisation allows companies to store card data and process sensitive information without directly touching it. This capability reduces dependence on single vendors and improves recurring payment performance.
“Tokenisation is actually one of the things that was a founding principle for Spreedly very early on,” Doug says. “But it’s really re-emerged as a key driver and key need for merchants because the ecosystem has gotten a lot more complex. We have things like agentic commerce and non-traditional, simple payment flows that are starting to emerge more and more.”
Ownership is often treated as a legal concept, but Doug argues that control is what actually matters. If a merchant owns the data but cannot adapt it to their specific needs, the ownership is useless. He stresses that businesses should have the flexibility to tailor their payment systems to fit their operations.
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Being able to move tokens between providers gives merchants leverage in negotiations and reduces the risk of vendor lock-in. This portability also allows for rapid performance testing. If a merchant sees a small percentage improvement in authorization rates by switching processing routes, they can act on it without a major system rebuild.
“That portability – that almost instantaneous control – means merchants can make small adjustments very rapidly,” Doug says. “If they see even just a small percentage improvement by going over here, they can make that decision. They don’t have to spin up some big project to unlock that maybe 0.2% performance uplift.”
Tokenisation also helps with card updating for recurring billing. When a customer loses a card, an automated account updater can refresh the payment details so subscriptions continue without interruption. This reduces involuntary churn, which often comes from failed payment credentials rather than a customer deciding to cancel.
By replacing sensitive card data with non-sensitive identifiers, tokenisation reduces the scope of PCI compliance requirements. Merchants handle the tokens instead of the raw data, which simplifies security management. However, Doug notes that the checkout experience must remain flexible to avoid losing the customer.
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Merchants need to be able to design and customise tokenisation features so they fit their branded checkout pages. If the user experience is slow or poorly designed, the security benefits may not matter. Consumers still want non-sensitive contextual data, such as BIN information, to help with fraud decisions while keeping raw card details out of scope.
Looking ahead, Doug believes tokenisation will support the rise of AI-driven purchasing. As systems become more involved in transactions, tokenisation provides a trusted framework for moving money. Network tokens will likely underpin these new flows, but consumer trust will remain a key factor.
Consumers may be hesitant to share card data with large language models. To overcome this, companies must educate users on how tokenisation works and why it keeps their actual card numbers safe. Doug argues that without this understanding, people will be reluctant to authorize AI-driven purchases, no matter how secure the technical framework is.
For the next 12 to 18 months, Spreedly plans to build on its existing token foundation. The focus will be on expanding network token coverage and deepening the platform’s role in future payment flows. The company aims to ensure that the infrastructure for agentic commerce is ready as the market evolves.
