Integrating payment transaction data, direct from source : Opportunities and limitations for large merchants

Abstract

Within the world of payments, the perceived importance of data continues to increase. In particular, there is a stronger desire for decisions to be data-driven and to leverage technology to improve financial performance. This paper discusses how large merchants can utilise their existing relationships with payment providers to collect high volumes of raw transactional data, straight from the payment provider’s own system. Such data can be utilised to address numerous paymentsrelated profitability challenges as well as to support strategic business plans more broadly. This paper describes a wide range of business use cases that may be facilitated by obtaining and integrating payment data, including process efficiencies, cost control, customer profiling, identifying revenue growth opportunities, and fraud insights. It also discusses the advantages of taking an in-house, raw-format approach to the gathering of payment transactional data, including avoiding added cost on the payment service fee, synergies in internal processing of data to universal standards, and ultimate control of the data once obtained. The paper goes on to address the essential challenges to overcome, notably management engagement and investment in the required infrastructure, and the risk of unrealistic expectations. Finally, the paper encourages large merchants to recognise the high potential value of payment transactional data, and to consider the use of such data in new and more expansive ways.