Have you intentionally devised a token strategy, or have you inherited one?
It’s a question worth asking — especially if business growth or new market expansion is on your roadmap.
If you’re only using tokens from a single payment service provider (PSP), you’re dependent on how that provider manages and updates those tokens. And while that setup can work for smaller businesses, it starts to break down once you add PSPs to support growth, expansion, or redundancy.
At that point, growing ecommerce startups and enterprises face a new challenge: how to manage primary account numbers (PANs) and tokens consistently across multiple providers. This is where standardizing tokens and simplifying token management becomes important.
In this post, we’ll walk through five considerations to help you evaluate whether your current, single-PSP token setup is still serving your business — or whether it’s time to adopt a more scalable token model using merchant-owned (universal) and network tokens.
Understanding Various Token Formats
The key to an effective token strategy is leveraging the token formats best suited to your ecommerce setup.
While all tokens improve security by converting PANs into indecipherable credentials, they differ in terms of their use cases and benefits:
PSP tokens are vendor-specific character strings and are used to boost security during the payment processing lifecycle. They cannot be decoded or migrated across networks, preventing the visibility and portability that’s needed to improve routing and optimize card lifecycle management.
Universal tokens — also known as merchant-owned or PCI tokens — are IXOPAY’s provider-agnostic tokens that can be stored and reused across PSPs.
Network tokens, issued and maintained by the card networks, are not only secure and provider-agnostic but also boost card lifecycle management abilities and authorization rates.
5 Considerations for Mid-Market Merchants Using a Single PSP
1. Control: Who governs your payment credentials?
When you use PSP-issued tokens, much of the control over your PAN data and resulting tokens is delegated to your provider. While this reduces operational and compliance burdens, it also increases your reliance on the PSP to manage lifecycle behavior on your behalf. Over time, this means the provider’s logic and use cases for retries, network tokens, and account updater effectively become your strategy. And because these tokens are PSP-specific, adding new providers introduces separate token vaults — fragmenting data and increasing complexity across channels.
Universal and network tokens, on the other hand, provide full token vault independence that allows you to not just add or remove providers — without migrating tokens — but also better manage retry logic and recurring payments. This is because universal tokens can be used as a backup option in the event that a network token cannot be provisioned.
Consider the following when evaluating your tokenization solution:
Who owns token creation, storage, and deletion?
How visible are token lifecycle events such as expiration, reissuance, or updates?
Are network tokens used behind the scenes? If so, do you have any insight into them?
Can token behavior vary across transaction types (e.g., recurring, retries, refunds)?
Bottom line:
PSP tokens keep PAN data management simple, which works well at a smaller scale. As performance and compliance complexity grow, universal and network tokens offer more control over how you can operate across providers.
2. Portability: How easily can your payment data move with your business?
Portability varies greatly among token types, which has important ramifications for business growth objectives.
Let’s say you’re a U.S.-based merchant with plans to expand into Latin America. However, your current PSP doesn’t support region-specific payment methods like Pix. If you’re only using PSP tokens, then you won’t be able to migrate your existing tokens to the new PSP. If you’re using universal or network tokens, however, stored tokens can be transferred and reused.
Key questions to consider include:
Can stored tokens be reused if you add a second PSP or acquirer?
What happens to tokens if you change providers?
Would customers need to re-enter card details?
How long and costly would a migration realistically be?
Bottom line:
Even if adding or switching PSPs isn’t on your roadmap, understanding the cost of change is part of responsible risk management. Keep in mind that PSP tokens typically prioritize convenience over portability, which may not support your long-term goals.
3. Performance: Do tokens actively improve authorization outcomes?
Tokenization can do so much more than just reduce PCI scope. By adopting a multi-PSP strategy and using network tokens alongside merchant-owned universal tokens, you can optimize retry logic and boost authorizations. Visa has found that network tokens improve authorizations by 4.6%, reflecting millions in recovered revenue.
Since network tokens are in sync with the card networks, expired, lost, or stolen cards don’t automatically equal a lost sale. Behind the scenes, the token and PAN association is managed by the network, so even if a card number is updated, the network token stays the same, resulting in higher authorization rates.
And if a network token isn’t available, the universal token can be used to retry the transaction. Retry logic can also support universal token transactions with a secondary PSP.
Executives should ask themselves:
Are tokens used consistently across recurring billing, retries, and card-on-file transactions?
Does your PSP leverage network tokens where available?
Are automatic card updates enabled and effective?
Are authorization rates stable or improving over time?
Bottom line:
Declining authorization rates are often attributed to fraud or customer churn, but poor token lifecycle management is a common — and fixable — root cause. Performance visibility matters, and network tokens can get you there.
4. Resilience: How well does your token strategy handle disruption?
Dependency on a single token vault or processing path could put your revenue at risk, as any PSP outage, regional issue, or unexpected transaction spike may bring incoming payments to a grinding halt.
A multi-PSP setup that incorporates universal and network tokens ensures greater resiliency, as transactions can be rerouted as needed. Consider the following:
Is your business dependent on a single token vault?
Do retries and fallbacks follow a merchant-defined token hierarchy?
Can transactions be rerouted or retried intelligently if needed?
How quickly can issues be diagnosed and resolved?
Bottom line:
Single-PSP token strategies are efficient, but they can concentrate risk. Diversifying processing channels and improving token interoperability offset this risk.
5. Scalability: Will this strategy still work 12–24 months from now?
The last thing you want is for your payment processor to dictate how fast your business grows.
If your token strategy isn’t portable and diversified, any business acquisition or market expansion down the line will stall growth. An influx of new customers and processing requirements would incur messy migration processes if your single-PSP token vault is locked in.
Ask whether your current approach can support:
Multiple payment service providers as needed for redundancy or expansion into a new region. You will need to own your token data.
New technologies (like agentic commerce, as merchant-owned tokens will be foundational)
Additional brands or business units
Evolving card network mandates
Customer experience/expectations
Bottom line:
Even if you don’t need enterprise-grade infrastructure now, preparing for growth today can prevent costly rework later. Moving beyond PSP tokens will pave the way for greater scalability and customer experience.
Signs it’s Time to Revisit Your Token Strategy
Wondering if your token strategy should be reconsidered? It may seem like things are running smoothly, but several indicators could hint that your default, single-PSP setup may not be sustainable:
Declining authorization rates over time
Expansion into new regions or channels
New business units or acquisitions
Greater reliance on recurring or stored card data/tokens
The need for redundancy or multi-PSP support
New or changing compliance requirements
Remember that revisiting your strategy doesn’t mean replacing your PSP. It means making sure your token approach aligns with where the business is going.
Bringing It All Together
For many mid-market merchants, starting with a single PSP and its native tokens is the right move. It’s simple, fast to implement, and meets your security and compliance needs.
Yet, as with any aspect of business operations, a token strategy must be revisited and reconsidered intentionally — rather than simply setting it and forgetting it.
The question isn’t whether your current approach is “good” or “bad,” but whether it will still make sense as your business grows. A well-designed token strategy:
Balances simplicity with future readiness
Makes trade-offs explicit
Improves performance — not just compliance
Keeps options open as the business evolves
To learn more about how updating to universal and network tokens can benefit your business, contact us today.