How Emerging Data Elements Can Support Mobile Wallet Use Cases
Consumers have never had so many choices in how to pay in-store. Today, in addition to cash, checks and payment cards, among others, in-store transactions can be completed by placing a mobile device, enabled by a mobile wallet app, near a point-of-sale (POS) device that supports contactless payments. In response to this ongoing evolution, the payments industry has introduced data elements that enable these new transaction types. Merchants can use these new data elements to support mobile wallet use cases, including improved customer experience, fraud prevention, troubleshooting and analytics.
The Emerging Data Elements
Three data elements emerging in this evolving environment are the token requestor identifier (TRID), wallet identifier (WID), and the payment account reference (PAR).
- A TRID correlates to the party who requested the payment token (a non-sensitive value replacing the primary account number of a payment card) from the token service provider (TSP). The TRID is represented by a unique 11-digit numeric value assigned by the TSP. In some cases, this is the wallet provider, but often the token requestor is a different party, such as an issuer or service provider.
- A WID correlates to the wallet that holds the payment token and that's presented at the POS. At present, the WID is most consistently used to notify issuers of wallets requesting the provisioning of their cardholder’s account.
- The PAR is a unique identifier associated with a specific primary account number (PAN), regardless of device; it's not associated with a cardholder. The PAR correlates activity across transactions linked to a PAN and its affiliated tokens.
Use Cases for New Data Elements
While availability of the new data elements are emerging, merchants accepting payment from mobile devices can leverage the information that they provide across several use cases, including the following:
- Transaction troubleshooting: Transaction information, like the TRID and WID, may be important for troubleshooting POS wallet transactions. Potential problems include failure to communicate payment information; high decline or chargeback rates due to data quality issues; or other latency, process or operational issues. Once problems are diagnosed, the merchant can proactively work with wallet providers and other payment partners (provided this data is available) to resolve the issue.
- Analytics and compliance: Data from wallet transactions can help companies understand customer preferences, improve business practices, and manage compliance. Merchants that understand wallet usage trends can tailor wallet partnerships (i.e., co-marketing) to better serve their customers and measure the success of the partnership. PAR could be used to analyze engagement and loyalty, such as customer overall spend or number of trips, while the WID or TRID may enable analysis by wallet provider. Emerging data elements can also be used in analytics to support compliance programs. For example, the PAR could be used to correlate transactions across a PAN and all of its associated tokens for anti-money laundering (AML) monitoring and other compliance reporting.
- Improved authorization and fraud prevention: PAR, WID and TRID may be useful in authorization and fraud routines. Merchants can leverage wallet data in their authorization and fraud routines, realizing a deeper data set upon which to build strategies and promoting less friction at checkout. For example, a merchant may identify a trusted third-party wallet using WID and execute a more streamlined checkout flow reflective of the perceived transaction risk.
- Customer service, returns and disputes: One complexity created by the use of tokens in mobile payments is that the last four digits of the token credential is different from the last four digits of the cardholder’s credit or debit number, which can cause confusion in a return or dispute. WID may help reduce this confusion by enabling the representative to share that the transaction in question was completed with a specific wallet. Or PAR, when supported by the issuer, can be used in the receipt lookup process to identify the original transaction even when the purchase and return took place in different channels or with different form factors for the same PAN.
Use of mobile wallets is growing around the world. By accepting this form of payment, merchants can better serve customers as well as take advantage of a new data source and co-marketing opportunities to help grow business and improve business processes.
Elements of this article were excerpted from the whitepaper, How Emerging Data Elements Can Support Mobile Wallet Use Cases. To read the full whitepaper, visit https://www.uspaymentsforum.org/how-emerging-data-elements-can-support-mobile-wallet-use-cases/. The whitepaper includes additional information on the status of implementation of these emerging data elements in the U.S. payments industry.
Randy Vanderhoof is director at U.S. Payments Forum, a non-profit cross-industry body focused on supporting the introduction and implementation of EMV chip and other new and emerging technologies.