Thursday, June 27, 2024
In today's rapidly evolving payments landscape, data is one of the most valuable resources for any company that processes payments, including card issuers and merchant acquirers. That is why new analytics tools and AI technologies are emerging. These tools allow companies to learn more about their operations, enhance customer experiences and transform the way business decisions are made.
However, despite the availability of powerful data-driven decision-making tools, many companies cannot leverage the true potential of their data because it resides in siloed databases scattered across many different systems.
Whether its credit, debit, prepaid, P2P or other emerging payment methods, payment service providers process a staggering volume of transactions every day.
The Clearing House settles more than $2 trillion daily through wire, ACH, check image, and real-time payments (see t.ly/dlT8e). And Capital One Shopping Research estimated that more than 1.86 billion credit card transactions were processed globally in 2022.
The rapid evolution of technology and the emergence of new analytics tools has shown that the power of payments data cannot be overstated. The ability to access and analyze this data has the potential to revolutionize decision-making and create new revenue streams.
Although companies processing payments have access to valuable data, the current challenge is implementing an enterprise data management strategy that provides access to all payments data, regardless of transaction type or source.
Some financial institutions and payment processors have tried to keep pace by continually upgrading their legacy systems with patches and updates. Yet this has left them with siloed infrastructures that can't be integrated, lack visibility and leave gaps in the processing of payments.
To capitalize on the full potential of payments data, companies are recognizing the need for a centralized repository where data from all disparate transaction sources is stored and securely managed. This approach consolidates siloed data from across an organization into a single, integrated repository.
Storing payments data in one place, and in a consistent format, offers many strategic benefits, for example:
It also enables more consistent data with the removal of challenges such as duplicate records and inconsistent data. All users have access to the same data, which results in consistent decision making across the enterprise.
It also enables them to validate, standardize, and enrich datasets to fuel customer analytics, improve decision-making and manage risks. Being able to evaluate available data and integrate external data into their payment operations enables them to bridge knowledge gaps. Furthermore, expanding data attributes and consolidating data into one platform enables processors to drive additional value.
DaaS provides a way to manage the massive amounts of payments data organizations generate every day to deliver valuable information to internal and external clients for data-driven decision making. This data can include insights into customer buying behavior, market trends and transaction patterns to help client companies improve their businesses.
To make the most of a centralized transaction repository, companies need the ability to view, extract, and analyze data. Consolidating payments data from all sources into a single repository requires robust data integration and management solutions to ensure data accuracy, completeness, and security. Once the data is centralized, powerful AI and analytics tools can be used to mine it for valuable insights. These insights can help companies make educated and strategic decisions that will result in improved customer service, new products and services, increased market share, and more.
Companies of all types and sizes can benefit from payments data analysis. One specific example is merchants. When addressed through a payment analytics lens, data can inform many important business decisions such as staffing, merchandise purchasing and product allocation.
Plus, payment data can help the merchant decide to expand its footprint into new geographic markets, offer new products and services, or accept new payment types. This is just one example of how the analysis of accurate, consolidated payments data can help a business grow.
In addition, companies processing payments are realizing they can no longer afford to overlook the power of data. The ability to access, analyze and leverage this data has the potential to revolutionize decision-making, drive operational efficiencies, enhance customer experiences and create new revenue streams.
A centralized transaction repository is essential in realizing this vision. As the payments industry evolves, organizations that leverage the full potential of their data will be at a significant advantage. The future belongs to those who can harness data and turn it into a strategic asset. 
Editor's Note: Jon Protaskey is an accomplished professional with over 25 years’ experience in engineering, developing, deploying and managing business critical software applications. Jon is director of software engineering at BHMI, a leading provider of software solutions focused on the back-office processing of electronic payments. The company is best known as the creator of the Concourse Financial Software Suite®—a proven collection of back-office products that allow companies to adapt to the rapidly changing world of payments. Jon can be reached at jon.protaskey@bhmi.com or 402-333-3300.
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