In today's demanding business environment, enterprises can’t afford not having full control over their payment processing to manage costs, mitigate risks, and maintain operational agility.
This case study reveals how a leading enterprise in the transportation sector, when faced with an unexpected and exorbitant price increase from its payment processor, utilized DataStealth's vaulted tokenization solution to turn a significant financial threat into a big cost-saving victory.
Their proactive approach not only averted a crisis but also solidified their negotiating power and future-proofed their payment operations.
A leading enterprise in the transportation sector manages critical infrastructure and services millions of customers.
Their operations necessitate a high volume of daily payment transactions, making efficient and cost-effective payment processing strategically vital to their revenue stream and profitability.
For a company of this magnitude, even seemingly small percentage-based processing fees accumulate into hundreds of millions of dollars annually, directly impacting shareholder value.
The transportation company recognized early the importance of maintaining flexibility and control over its payment ecosystem.
This foresight became paramount when market dynamics shifted, threatening to erode their financial stability from an aggressive pricing maneuver by their payment solutions vendor.
Many enterprises typically rely on their incumbent payment processor for tokenization (the process of replacing sensitive card data with secure placeholders called tokens).
It’s a standard practice, but dependency carries a critical business vulnerability.
When our customer’s incumbent processor was acquired by a new entity, the merchant received a shocking ultimatum: a 400% (4X) increase in their processing fees.
This sudden demand placed the merchant in a precarious position.
Accepting the new terms meant a massive, unsustainable surge in operational costs, directly threatening their bottom line. Negotiating was also a challenge, as the processor controlled the merchant's tokenized payment data; the enterprise was at a significant disadvantage.
The alternative – i.e., switching processors – presented its own daunting set of risks if their tokens remained locked with the incumbent.
Processors often charge substantial "break fees" to release tokenized data; in similar cases, these fees have run as high as $6 million.
Furthermore, asking customers to re-enter their credit card details due to a processor switch would typically lead to an estimated 20% customer churn – a significant loss for an enterprise processing millions of transactions.
The potential for business interruption and the sheer operational undertaking of migrating the payment data added further pressure.
The company needed a way to regain control, and fast.
Adding to the complexity, the incumbent processor had previously demonstrated aggressive tactics. When they learned the merchant was exploring DataStealth for independent payment data tokenization, they had threatened to halt all payment processing, underscoring the power imbalance when merchants are locked into a single provider.
Just before their payment processor tried to impose a massive price hike, the transportation company had already made a smart move: they’d deployed DataStealth’s independent, vaulted tokenization solution.
That decision turned out to be a game-changer.
DataStealth became their silent ally, sitting between them and the processor, like invisible glue, keeping everything working, but without locking them in.
Because the customer payment tokens were stored securely in DataStealth’s vault, the merchant wasn’t tied to any one processor. They held the keys to their own payment data, and that gave them the freedom — and leverage — to push back.
When a transaction occurs, DataStealth securely provides the necessary card data to the designated payment processor for authorization, while the merchant’s systems only ever interact with the persistent tokens stored in the DataStealth vault.
This architecture means that Primary Account Numbers (PAN/actual credit card numbers) are removed from the merchant's systems and environment.
This significantly shrinks the scope of their Payment Card Industry Data Security Standard (PCI DSS) requirements, leading to lower compliance costs, reduced audit complexity, and enhanced data security.
Critically, switching payment processors becomes a remarkably simple process.
Instead of a complex data migration, it involves a straightforward configuration change within DataStealth – often just a simple API call update or a DNS change – to redirect transactions to a new provider.
The transportation company's IT and procurement teams could therefore confidently issue a Request for Proposal (RFP) to other payment processors without extensive, time-consuming pre-consultations with DataStealth, thanks to the platform's transparent nature.
The client knew the switch would be swift and painless.
Armed with control over their tokenized data, the transportation company successfully put their payment processing needs out to an RFP. The outcome was transformative.
They secured a new agreement with an alternative processor at a rate 20% lower than their original price with the incumbent processor – i.e., the price before the threatened 4X hike.
This strategic maneuver, entirely enabled by DataStealth, converted a potential 300-400% cost increase catastrophe into an actual 20% recurring cost reduction.
The merchant described the ROI of DataStealth as "instant.”
The minimal cost associated with the DataStealth change request and minor IT adjustments was insignificant compared to the substantial annual savings, with payback estimated in weeks.
For an enterprise of this scale, a 20% reduction in processing fees can translate into tens of millions of dollars in annual savings.
Because DataStealth held the tokens, the switch to a new payment processor was seamless for the transportation company’s customers.
There was no need for customers to re-enter their payment information, therefore entirely avoiding the potential 20% churn rate and protecting billions in revenue.
The company also completely bypassed the multi-million dollar "break fees" they would have faced if the incumbent processor had controlled their tokens.
The merchant got the crucial ability to select and switch payment processors without punitive penalties or complex data migration projects.
This new agility means the transportation company is no longer at the mercy of a single payment provider's technology, terms, or pricing whims.
Should their new processor become uncompetitive or if they experience service disruptions, the company can quickly pivot to another provider.
This capability is critical for enterprises where transaction uptime is paramount, and revenue loss is measured by the minute or by the second.
By removing PANs from their environment, DataStealth significantly reduced the transportation company's PCI DSS compliance scope and associated costs.
Their IT and procurement teams experienced firsthand the ease of managing their payment data tokenization system with DataStealth; a decision that once required extensive planning and risk assessment now involves a straightforward, low-impact technical adjustment.
They are now empowered to make strategic business decisions with confidence, knowing their payment infrastructure is secure, flexible, and cost-effective.
This leading transportation enterprise turned a damaging 400% price hike into a 20% cost reduction, all while enhancing their negotiating power and operational resilience.
With DataStealth's vaulted tokenization solution, they avoided millions in potential exit fees, minimized customer disruption, and simplified their PCI DSS compliance.
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