Want To Buy Tokens? Pretend It’s A Marketing Program

Written by Todd L. Michaud
March 20th, 2012

Todd Michaud runs Power Thinking Media, which helps retailers and restaurants tackle the convergence of social, mobile and retail technologies. He spent nine years delivering technology solutions to more than 10,000 retail locations as VP of IT for Focus and Director of Retail Technology for Dunkin’ Brands.

Information security programs are notoriously difficult to implement. They are likely to cost money or negatively impact business operations or both. Business leaders want to think about making more money or reducing costs.

Info-sec projects typically are sold on the “risk avoidance” platform, which is not the best political platform to be campaigning on. When it comes to difficult business cases, sometimes you need to package your projects differently—like, say, a tokenization program disguised as a loyalty program.

There is no doubt that one of the best ways to fight credit-card security issues within a retail environment is to remove the credit-card numbers from the system. As a retail CIO, you have fought the good fight with PCI for years, and finally tokenization has become a reality. You anxiously present the tokenization business case to the executives, only to get shot down in under 15 minutes. “We are already compliant without this, right? Why would we spend additional money for every transaction when we already pass the test?” You fight back with the “secure vs. compliant” argument but only dig a deeper hole. “The PCI rules are ridiculous and change almost every day. We are not spending any more money on PCI than we absolutely have to.”

A month later, you are back in front of the same executives. The marketing chief is talking about how your brand needs a new, leading-edge loyalty program. You offer up that there is new technology in place that will enable your brand to create a loyalty system without forcing customers carry another plastic card, tag or smartphone application. You can simply and safely use the consumers’ credit-card numbers to track their purchases. “It is even PCI compliant,” you throw in for good measure. You leave out the fact that this technology is called “tokenization” and focus on the benefits of a credit-card-based loyalty solution. Now you’ve got everyone’s attention, and they want to know more.

First, a rant: I find it ridiculous that in today’s payment environment tokenization is being sold at an additional cost over traditional payment processing. It is in everyone’s best interest to secure these transactions as much as possible. The fact that merchants are being charged more to implement a system that, frankly, should have been designed this way from the start is beyond laughable. But hey, the payment industry is the technology equivalent to the Twilight Zone.


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