Card brands have recently introduced network tokens, which can serve in the payments processing ecosystem as an alternate to existing gateway, acquirer or merchant tokens in that they are specific to individual cardholders at a particular merchant. Early benefits of this technology include incremental transaction security measures via a one-time use cryptogram (similar to an EMV transaction), higher authorization approval rates, a reduction in consumer friction at checkout and elimination of updates to payment methods if a card is lost or stolen. Clint Cady, Director of Payments at W. Capra stressed, “As with any change to your payment architecture, it’s imperative to be deliberate and attentive as to both the benefits and impacts of the change that you’re assessing.”
Evaluate your goals and use cases
As network tokenization itself is in its infancy, so too is adoption of network tokenization. Even if the payment card brands are pushing this new capability, or you as a merchant hear of other merchants implementing network tokenization, it’s important to take a holistic step back and think about the goals of your payment architecture to determine whether network tokenization is a strategic fit for your organization.
“When adding single facets of payment acceptance, your thoughts have to expand to the entirety of your payment architecture and payment operations,” Cady added. “Thinking through a change holistically and conducting the full-scale analysis on whether it will complement or negatively impact your current program, is vital.”
Does your payment infrastructure look like a knotted ball of yarn?
Unfortunately for merchants, navigating the complexities of U.S. Payments can often seem akin to untangling yarn. Cady opined, “There is no such thing as a simple change or update to how payments are handled for the majority of U.S. merchants. That is not to discourage anyone from considering the addition of network tokenization to their program, but to encourage anyone who’s forging such a path to incorporate the impacts, benefits and other considerations such as routing implications related to network tokenization into their ongoing dialogue as it pertains to commerce and consumer engagement.”
Clint Cady is dedicated to assisting W. Capra clients with all things payments.
For further discussion, contact Clint Cady at [email protected].