How can business intelligence (BI) help banks and other merchant acquirers?
Traditionally, merchant acquiring has been a pretty straightforward business. Acquirers processed payment transactions, provided authorization and the settlement of payments. Put it simply, acquirers made it possible for us to pay with bank cards everywhere we went.
With rising competition in the payments industry, leading acquirers cannot be a simple link between merchants and card holders. Acquirers are quickly introducing additional value-added services to attract new clients. One of such useful extra services provided by acquirers is BI based analytical platforms.
Mastercard Merchant Insights
The author recently worked with one such BI-powered tool, the Mastercard Merchant Insights. The platform uses data from Mastercard payment transactions and turns them into a dashboard. Then acquirers can offer the dashboard to their merchants as an additional service.
Mastercard processed over 70-billion transactions in 2019. Obviously, all those purchases left a trail of data on everything from a geographical location to individual consumer behavior. The company put all this data together and came up with the BI platform for merchants.
The analytical platform provides merchants with answers to some key questions about existing customers. These include customer behavior, spending habits, the comparison of a merchant’s location with other similar shops in an area, and a percentage of payments from international bank cards. All these insights can be crucial when making business decisions.
This information is in the form of customizable and easy-to-read dashboards. This is essentially a type of self-service BI for merchants.
How merchants can attract more client
One practical example of using information from the merchant insights platform could be the following. A merchant sees an increase in transactions from bank cards issued in Germany during summer months. The shop then decides to hire a German-speaking staff. That sales rep provides better customer service to German tourists, which results in more sales.
Another useful way to use the platform is to track the activity of businesses that are similar to yours in size and type. Now you can decide to move your business from one part of a city to another based on real intelligence not just your gut feelings.
According to Aarti Sharma, VP of technical operations at Mastercard, the company’s expansion into analytics was a “natural next step” in the merchant acquiring services.
“The work of the strategist, then, becomes asking the right question,” Sharma said.
Indeed, simply providing acquiring and processing services for customers is the thing of the past. By providing BI platforms to get insights on customers, acquirers take the guesswork out of decision-making. This in turn, moves an acquirer from the simple status of a service-provider to partner, increasing trust and loyalty in the eyes of merchants.
As acquirers realized that they need to build entire digital ecosystems to keep existing clients and attract new merchants, BI and analytics-based services, such as the Mastercard Merchant Insights platform, will become popular tools in the days to come.