Tokenization has gained new visibility as a way to enable a secure mobile payments transaction for retail consumer transactions. Although that’s where the discussion of tokens has been squarely focused, the technology does present significant opportunity for B2B commercial applications using mobile phones.
PYMNTS caught up with Christina Hall, Senior Product Development Manager at TSYS, to discuss the opportunities and challenges as tokens — and mobile payments — find new opportunities in commercial payments.
Beginning with a “10,000 foot view,” Hall notes that there are plenty of opportunities for card issuers to adopt mobile payments – “especially for corporate or travel cards, purchasing cards and fleet cards,” she says. “But we need to consider the go to market approach and how it may differ from the consumer launch.” Though opportunities are there, for the technology providers themselves (such as TSYS) “no formal roadmaps have been published indicating when commercial cards will be supported.”
Though the timeframe may be a bit vague – at least for the moment – Hall remains certain of the inevitability: “Make no mistake about it,” says Hall, “mobile payments for commercial cards is coming. It’s not a matter of if, but when.”
As for what will drive adoption of commercial mobile payments, Hall asserts that acceptance of the new technology is likely to be governed by three factors.
One of the most important drivers is user experience and expectations, which take a cue from interactions with consumer-based mobile payments. “For years, we have watched the convergence of personal consumer preference impact the corporate setting,” she explains. And today, “there is a shifting mindset among employees, who now expect to conduct and manage their [professional] business with the benefit of intuitive tools and applications similar to those they use to conduct ‘personal’ business.”
Data security remains an important factor, too, she said. That should come as no surprise, given the headlines that have dominated business headlines around the world – and data breaches extend across pretty much all industries, from retail to health care (and quite recently, government offices as well).
On the security front, says Hall, some standards are already taking shape through the likes of Apple Pay that might indicate similar safeguards for commercial and corporate transactions. “Apple Pay utilizes tokenization; which is a process where a ‘token,’ replaces the 16-digit primary account number or PAN — thereby protecting the account information,” explains Hall. “The security provided by tokenization combined with other elements in the mobile device may help drive demand.”
And of course, there is the need for increased acceptance of tokenization by the merchants themselves, says Hall. As EMV’s deadline and liability shift looms, many merchants (though at this point not a majority, as has been noted by PYMNTs before) are upgrading their onsite POS terminals.
“A large number of these terminals can accept payments using Near Field Communication (NFC), Hall points out, adding that mobile commercial payments will likely gain traction as more merchants upgrade their systems.
However, she cautions that it may not be all smooth sailing. There are some other factors at work that may in fact hinder a linear embrace of mobile commercial payments.
“In 2014, just prior to the Apple Pay release, TSYS researched the needs of business travelers. We asked them about mobile payments and the use of NFC,” Hall recalls. “Though the majority of those surveyed were familiar with it, 87 percent had never actually used it for travel related payments. Perhaps this is simply because innovators like Apple and Samsung weren’t yet involved, but nonetheless security and lack of merchant acceptance were cited as concerns. This demonstrates that security and merchant acceptance can both be seen as demand drivers and potential barriers to adoption.”
One possible stumbling block comes in the form of cardholder authentication processes. “For commercial users, this may be difficult,” Hall theorizes. “It’s not uncommon for a commercial user to be unsure about the information associated with their corporate account. For example, if they work and transact in a decentralized environment, will they know whether the local office or the corporate home office is the address associated with their account?”
Corporate executives themselves may be wary about mobile payment adoption. Risk professionals and other administrators, said Hall, may want to implement detailed policies governing the use of company cards within mobile wallets. “Some organizations may choose to limit the use of corporate cards to wallets residing on company-issued devices versus personal or BYOD devices.”
And in terms of advice to those corporations looking toward mobile payments as an area worth exploring, Hall notes that though adoption may be in its infancy, “it’s important to join the conversation. Some may think that it’s too early, seeing as we are waiting for official roadmaps and announcements, but don’t wait to educate yourself or your organization.”
Senior Product Development Manager, TSYS
Christina Hall is tasked with defining the company’s commercial payments strategy and working across the TSYS enterprise to deliver payment solutions for issuers who support the small business corporate and government sectors. She has more than 10 years of professional experience serving financial institutions the payments industry and non-profit organizations. Christina has a bachelor’s degree in management information systems from Troy State University and a Master of Business Administration from Auburn University.