'Analytics and Loyalty - Something Acquirers and Processors Can Turn to Their Advantage'  Says VISA Chief

Bill Gaida, SVP Devices, Platforms and Mobile Operations of Visa said, The idea of using data analytics technology and skills is something that Visa can turn to their advantage.

The global m-commerce market has nearly reached the $500-billion mark. According to a prediction by eMarketer, 22% of all retail commerce sales in the US will come from purchases made on mobile devices. The total value of mobile commerce is expected to exceed $120 billion by 2017 with more than 150 million users. Mobile commerce growth in the US is driven by increasing convenience, value and security available to consumers via mobile devices.

According to data from Monitise, mobile commerce is growing at about three times the rate of e-commerce. Mobiles account for 20% of all online purchase volume worldwide. In addition, mobile commerce also allows brick-and-mortar retailers to engage with their customers better when they are near the store or in-store by using proximity marketing techniques.

The transaction processing industry is experiencing a sea change in the present era with emerging software technology in the payment sector with the introduction of new payment methods such as mobile point-of-sale, Android Pay, Square, Apple pay, etc. It is rather very important for these processors to adapt to the new technology of payments. Mobile payments, loyalty and analytics have provided the players operating in the payments processing industry an entirely new revenue stream to grow.

According to a report by GrowthPraxis, the market for value-added services is expected to be greater than the market for processing by 2019. The processing revenue is expected to be $17.4 billion by 2019. Value-added services such as analytics, loyalty programs, proximity marketing and prepaid cards are in huge demand by merchants. Processors and acquirers, being in direct contact with the merchants, have a great opportunity to up-sell/cross-sell these solutions and provide platform/program management support to merchants. Of all the value-added services, prepaid cards, analytics & loyalty program development market is expected to be the biggest revenue generator for the industry in the years to come.

Analytics allows organizations to identify patterns and categories cardholders through a multitude of attributes and variables. Mobile technologies have greatly enhanced this data collection by giving organizations valuable information about individuals’ transactions, preferences and online interactions. Acquirers, processors and network providers can derive benefits by offering analytics as a loyalty service.

Given the amount of customer transaction information being collected, they have a huge opportunity to use that data to better serve and retain their current cardholders and acquire new ones. Transaction data derived from customer activities like purchases, cash withdrawals, balance transfers or ATM withdrawals will provide a complete picture of cardholder behavior and, in turn, identify which cardholders are the most profitable.