How does your organization leverage transaction data?

Data-driven decision making has become pivotal in the corporate world. As consumers leverage a wide array of options to complete transactions, maintaining an awareness of those consumers, their spending habits, and their experience across business systems is critical to remaining competitive in the marketplace. Data is critical to those activities, and for merchants, leveraging transaction data is particularly crucial. 

Jim DuBoyce, Director at W. Capra Consulting Group, weighed in: “It’s critical for merchants to own their transaction data and know how to properly use it. Its greatest impacts come in three major areas: managing cost of acceptance, tracking consumers, and uncovering hard-to-spot operating challenges.”

1. Reducing cost of acceptance eliminates a barrier to profitability

Cost of acceptance is a vital metric in understanding a merchant’s underlying cost of completing payment transactions. DuBoyce elaborated, “Many merchants lack awareness of their cost of acceptance because of the number of factors at play in that cost. Interchange qualifications, acquirer fees, your overall transaction mix, fees passed down by card brands to transaction-level data—these all play a part in your cost of acceptance and impact your bottom line.”

2. Transaction data provides a full picture of the consumer journey

With myriad updated privacy rules and restrictions, it has become increasingly difficult to track consumers online. However, transaction data contains useful identifiers which, though anonymized, provide a window into consumer trends. DuBoyce stated, “Transaction data can help you reinforce your overall picture of your consumers. With the rise of tokenization, the unique tokens generated during transactions identify consumers, their journeys, and their behaviors through discrete moments in their relationship with your marketplace. The leaders in many verticals leverage this data to build relationships with consumers and streamline the consumer journey.”

3. Eliminating operating challenges reduces operational expenses

Many operating challenges lurk beneath the surface, but transaction data can help uncover them. DuBoyce expounded, “Transaction data like authorization rates by issuer, EMV chip read fails, and communication status can help to more quickly diagnose and resolve operating challenges as varied as reducing high decline rates or determining what locations in your network were knocked offline during a major storm.”

Analyzing the Data

Obtaining transaction data can be difficult, with the number of third-parties many merchants interact with. Analyzing the data is the most difficult—and most fruitful—part.

“The data is scary,” DuBoyce said. “It comes in huge files in a variety of file formats that contain the data on millions of transactions processed each day. Having an effective funnel to collect, organize, and analyze that data is critical to your company’s success, but it doesn’t happen overnight. Handling that quantity of data and understanding it is a monumental task. There are a lot of pieces to the puzzle.”

DuBoyce continued, “It helps to have an expert who understands the KPIs critical to success in your industry and who can help you architect, design, implement, and test a solution that gives you the numbers you need to make informed decisions. W. Capra has helped numerous clients obtain, sift, and analyze data from acquirers to drive cost reductions, resolve operating issues, and eliminate obstacles in consumer journeys.”

Jim DuBoyce is dedicated to helping W. Capra clients to reduce their cost of acceptance and successfully implementing payment operations solutions.  For further discussion, contact Jim at [email protected]

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