Cash in On Payments Data

Business success often hinges on your ability to better understand your customers.

Even as the digital era brings a growing number of faceless transactions, there are many ways that businesses can easily learn more about their customers' interests, brand loyalties and lifestyles. While online marketers may utilize more traditional outlets like social media, Google and marketing analytics to learn about customers, many are overlooking one valuable resource - payments data.

Rooted in the data, which is gleaned from every card transaction, is the basis of "payments intelligence", which provides underutilized and valuable data about customers and the payment choices they make. Payments data is often left unstructured and never acted upon, let alone optimized. But a new way of thinking allows merchants to get around that trove of payments data. No longer should there be a commodity-driven approach to payments, rather, you should look at payments more intelligently - as fingerprints left behind by your customers allowing you to better know and understand them.  

For example, the card type a customer uses reveals a lot about that person. Just knowing whether he or she is using an American Express or a store card can reveal their level of affluence or degree of loyalty to a brand or store. Additionally, the type of card used can reveal insights into a consumer's geographical location. Are a lot of your customers using prepaid Visa cards? Which states are driving what forms of payment? Perhaps MasterCard is your customers' preferred choice of payment method. This information can be overlaid with other data points and interpreted by your business to make more informed marketing, service or general business decisions.  

The payments engine of the future will be filled with intelligence that will allow businesses to calculate a customer's lifetime value, predict the propensity for a customer to make the next purchase and even personalize offers to individual customers. These actionable insights serve online merchants in two ways:

1. They can be factored into CRM and marketing activities that are part of your total customer experience.

2. They can help you avoid billing cycle disruptions and/or avoid certain transactions all together.

As disruption occurs in the traditional provision of payments services, payments intelligence is becoming more realistic. While much of the data involved in payments intelligence has been available for years, a new generation of developers and systems is approaching transaction processing with the mindset of app-driven SaaS developers - where intelligence drives new action.

Gathering payments data and turning it into actionable payments intelligence is easier than it sounds. Every retailer or service provider that processes payments is sitting on increadibly valuable data, if they know where to look and which questions to ask. Questions like "Is this a repeat customer?" and "What card brand does this customer use?" can reveal more than you might think and can help you realize payments intelligence fluency. 

With only a couple of months left until the busy holiday shopping season, businesses have a lot to gain if they simply look at the data that they are already collecting. Understanding who your customers are through their payment data can ultimately have a large and positive impact on marketing and customer relationship management. The countdown is on - will you know who your customers are by Thanksgiving?

About the Author: Sayid Shabeer is the director of customer success at Litle & Co. His team focuses on value delivery to clients across their Litle experience - from sales to on-boarding, continuing through to merchant services.