How to Help SMBs Compete And Thrive

Unified token payments offer benefits that include but go well beyond enhanced security. That’s why they’re just what merchants need in today’s hypercompetitive marketplace.

Retail today is undergoing significant transformation. Businesses must quickly adapt to shifting consumer demographics, preferences, and technology to remain competitive or face the harsh realities of being left behind.

Large merchants are heavily investing in technology that gives consumers consistent, seamless omnichannel experiences, whether they choose to shop and purchase online, in-store, from mobile or unattended devices and more. Small and midsize businesses (SMBs) want the same kind of experiences for their customers, but lack the financial and technical wherewithal to stay competitive.

That’s where unified token payments come into play. They empower SMBs with technology that delivers value well beyond payment acceptance while giving consumers streamlined shopping experiences that remove friction across all channels.

What Are They?

Payment-tokenization technology replaces actual payment card numbers, known as primary account number (PAN) information, with randomly generated tokens. Merchants don’t store card numbers; they use tokens to associate customers with their account information, removing sensitive information from the transaction process.

With tokenized payments, a token vault stores card-on-file information, enabling merchants to recognize a customer at any point of engagement, whether online or at a physical, mobile, or unattended point-of-sale location. Customer profiles are instantly created with speedy click-box opt-in permission to collect data.

For merchants, virtual, mobile, and countertop terminals are all integrated under one merchant identification number.

How do unified token payments help SMBs? To begin with, they enhance data security. No matter where or how consumers pay, data must be protected. With tokenized payments, credit card numbers are transmitted from the point of transaction origination to a token vault and are never part of the SMB’s system.

If hackers gain access to the merchant’s payment system, all they find are tokens of no value as cardholder information is rendered essentially useless. Besides minimizing value to hackers, tokenized payments protect data from various individuals connected with SMB organizations, including employees, vendors, and suppliers.

Tokens also simplify PCI compliance. With many day-to-day operational responsibilities, SMBs are frequently unaware or confused about their Payment Card Industry Data Security Standard (PCI DSS) compliance responsibilities. Since no sensitive data is stored on SMB payment or computer equipment, tokenized payments take the compliance monkey off SMB’s backs.

This significantly reduces the burden of PCI DSS requirements and audits, saving SMBs valuable time and money while enabling them to focus on running their businesses.

In addition, unified token payments enable data to be leveraged. SMBs gain a powerful single view of their business across all channels, offering greater visibility into their customer base and a higher understanding of individual behaviors to create new revenue streams.

For example, merchants can use data from a tokenized payment solution to feed loyalty and rewards programs that show when customers are most likely to purchase. Anomalies, such as a regular customer who hasn’t purchased in a while, can also be revealed.

More data gives SMBs the insight they need to target customers, as well as drives personalized communications and special offers to entice customers to return and spend more.

Unified token payments enable e-commerce businesses to offer one-click payments that significantly increase checkout conversion, and even permits them to accept payments and recognize customers at pop-up locations.

Health-care providers with online payment portals can also accept in-office or mobile payments and associate them all with a patient account using unified token payments. And fitness centers can easily establish recurring billing while allowing their members to put vending purchases like snacks and water bottles on their accounts.

Tokenized payments also improve the customer experience. In other words, this is so much more than just secure technology. Tokenized payments help create seamless, fast, and easy payment experiences that result in satisfied customers.

Ride-share services have made paying and tipping as simple and painless as possible. Big-box retailers have made “shop online, return in-store” an in-demand consumer preference. That’s the power of unified token payments, and SMBs now can harness these capabilities.

Seamless Commerce

Offering point-of-sale and payment solutions suited to SMBs based on a lack of complexity and budget-friendly price points may have been a good strategy in the past. But to compete in today’s connected marketplace, merchants of all sizes need the ability to provide frictionless, convenient, and personalized customer experiences.

Leveraging unified token payments can be a creative solution to give SMBs capabilities that rival those of large merchants. They will be able to better compete, while making seamless commerce a safe reality everywhere it takes place.

—Nick Starai is chief strategy officer at NMI, Roselle, Ill.