Speak with any merchant today, and chances are they’ll affirm the power of payment data to fuel smarter, more lucrative decision-making. From reducing abandoned carts to delivering tailored checkout experiences, the applications of payment data are tremendous.
The challenge isn’t that business owners lack appreciation or interest in leveraging transactional insights, it’s that doing so has become very complicated. Over the past decade, advances in payment security and evolving regulations have increasingly masked payment cards’ Primary Account Numbers (PANs) behind tokens. And while tokenization has greatly cut down on fraud, it has blocked access to what was once a reliable cardholder identifier. The result? Merchants are struggling to track cardholder activity and recognise repeat buyers.
The rise of digital payments and the proliferation of payment software add another layer of complexity to modern payment data management. The average enterprise merchant receives payments from a wide range of channels and methods – such as mobile wallets, card-on-file, and card-present transactions. With such a diverse array of tokenized payment types that are often routed through multiple processors, it can be difficult to link transactions to a single PAN.
EMVCo’s Payment Account Reference (PAR) is the missing piece to secure data management within this fragmented landscape. PAR is a non-financial alphanumeric value that’s assigned to every PAN and its associated tokens – enabling merchants to connect transactions across all channels, payment methods, and token formats.
Because PAR numbers cannot be used to initiate transactions, they are not subject to security regulations like Payment Card Industry Data Security Standards (PCI DSS) and, thus, can be freely accessed by merchants. This means that, instead of storing sensitive PAN data, merchants can leverage a universal cardholder identification system that’s out of scope for PCI compliance.
It’s important to note that the shift away from PAN-based identification is part of a bigger plan to eliminate card numbers entirely. Visa and Mastercard aim to phase out card numbers by 2030, as the use of network tokens and biometrics offer a secure alternative to manual card number entry. Within this numberless card system of the future, PAR will become necessary to identify cardholders – which means that adopting PAR now is a great way for merchants to get ahead of the curve.
PAR is a game-changer for merchants who accept a wide range of card-based payment methods both on-site and online – for example, restaurants, hotels, and retail brands.
Consider a hotel group with a multi-PSP tech stack in which customers can make reservations online with a card number, then order a drink at the hotel’s bar by tapping their mobile device, and then store their card on file for room service. Without PAR, the merchant would struggle to identify these separate purchases as coming from a single buyer. Without this crucial insight, customer engagement and loyalty efforts remain generic and ineffective.
Yet, armed with PAR, businesses glean a 360-degree view of customer behaviour that enables them to extract meaningful business intelligence. The use cases of PAR include:
PAR equips customer service teams with full transaction histories so that they can instantly track spending patterns across channels and payment methods – no detective work or customer verification is needed. Handling returns, disputes, and refunds is that much easier when service reps have a complete view of customer behaviour.
With improved visibility into buyer behaviour and customer lifetime value, PAR enables sales and marketing teams to build out rich customer profiles and provide smarter engagement and rewards. For example, PAR can ensure that point-earning opportunities are detected across all purchasing channels and payment methods, and it can support automated email campaigns that are triggered based on specific spending patterns.
By properly linking all uses of the PAN across various formats, PAR helps merchants and financial institutions distinguish between new and existing customers and detect suspicious behaviour. This is crucial for creating accurate risk profiles and curbing friendly fraud, multi-account fraud, and promotional fraud.
The potential of PAR within retail environments is incredibly promising, and we are only scratching the surface of how this secure identifier can revolutionise data operations. With the card brands leading the charge by embedding PAR into their tokenization solutions, we can expect swift adoption by merchants and PSPs in the years ahead. And as the industry moves toward broader implementation, early adopters will be well-positioned to stake a competitive edge – and shape the future of payments.
Brady Harris is a seasoned fintech executive with over 20 years of experience leading high-growth financial technology and SaaS companies. As CEO of IXOPAY, he is dedicated to advancing global payment solutions. During his tenure at Dwolla and Payscape, he oversaw significant increases in payment volumes and user engagement and fostered cultures that prioritise agility and high performance. Additionally, his expertise in mergers, acquisitions, and scaling companies is key as IXOPAY positions itself as the one-stop payment industry solution. Harris's commitment is not only to enhance enterprise value but also to empower his teams and clients in the evolving digital payments landscape.
IXOPAY is a provider of enterprise-grade payment orchestration, enabling businesses to simplify, secure, and scale their payment systems. In 2024, IXOPAY orchestrated over USD 40 billion in transactions for customers from over 30 countries. With a fully integrated platform, tokenization, and flexible payment optimisation modules, IXOPAY enables enterprises to manage payments seamlessly across multiple providers. Learn more at www.ixopay.com.
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