In recent years, the concept of a Payment Account Reference (PAR) has emerged as a way of identifying customers without using a singular payment credential. As Google and Apple have cracked down on cross-device tracking, and social media platforms have made it more expensive to assemble and market to consumer profiles, PAR may prove invaluable to effective consumer engagement.

What is a Payment Account Reference (PAR)?

PAR is an alphanumeric reference point that enables a business to track a consumer and their payment account across the various payment methods they use. For example, a consumer may have 3 credit cards in their wallet, each of which would generate a different token if used in a tokenized environment. PAR links these cards to a single payment account and broadens the idea of tracking a consumer’s activity across payment methods beyond the scope of a single merchant.

Nathan Rao, Consultant at W. Capra, chimes in, “Where a token might be linked to a specific credit card number or PAN, PAR makes it possible to track a single payment account or consumer across the cards that are linked to that account and across acquirers and merchants.”

Evolution of PAR

PAR has been evolving for a couple of years, but infrastructure is lagging behind the idea. The challenge with PAR’s implementation is that it relies on an integration between every piece of the payment ecosystem. The merchant’s infrastructure, payment gateways, payment acquirers/processors, and BIN controller, to name only a few, all need to work together for PAR to function.

Clint Cady, Partner at W. Capra, elaborates, “PAR was an idea that came about several years ago when merchants, payment hardware providers, and acquirers started thinking about how transaction data could be leveraged to create a profile of a customer across their cards. It has promise in other areas, but the idea has reemerged with the tightening around consumer data.”

Why does PAR matter?

PAR has applications in loyalty, CRM, and fraud outside of traditional payments. Unlike a PAN or a token, it can’t be used as a payment method, but it can be used to identify a customer across payment accounts to create a cross-merchant profile. Such a profile can enable you to mitigate fraud and funnel loyalty inputs into your CRM, all while isolating your data environment from exposure to Personally Identifiable Information (PII).

Cady continues, “When implemented correctly, PAR can enable you to heighten your awareness of your consumers and their buying patterns while accessing less of their PII, broadening your awareness of their preferences and buying patterns while limiting exposure to data privacy concerns.”

How can I use PAR to my company’s benefit?

With its applications in loyalty, CRM, and fraud, PAR should be part of a well-rounded payments strategy. Because we’re still early in its evolution, it’s a best practice to begin digesting how PAR works and will continue to work in the future. Rao says, “Build an early understanding of how PAR enters your ecosystem to enable its use in your fraud and CRM applications. From there, it’s critical to decision on that data to generate automated and improved fraud decisions that inform the strategic direction of loyalty initiatives.”

Companies that are aware of how to implement and decision from PAR will have a leg up in the industry. Partnering with a third-party that understands the implications of PAR and its impact in the payments, loyalty, fraud, and marketing spaces is critical to making the most of PAR’s competitive advantage.

Clint Cady and Nathan Rao are dedicated to leading W. Capra clients on all things payments. For further discussion, reach out to Clint (ccady@wcapra.com) or Nathan (nrao@wcapra.com) to learn more about PAR and its impact on the payments space.