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Alternative Data in Payments Processing: The NextGen Payments Trend Increasing Customer and Retailer Loyalty

In this special guest feature, Gary Read, Import.io CEO, discusses how leading payments processors have already discovered the value of web data and are using web data to create a better experience for both the consumer and the retailer with heightened transparency to reduce fraud and personalized shopping experiences. As more payment processors integrate web data into their mobile and web solutions, more consumers will benefit from the “frictionless finance” achieved through customized digital user experiences while retailers build brand loyalty, increase customer touch-points and create the personalized experience consumers desire. Gary leads Import.io’s team of engineers, data scientists, product gurus, marketing mavericks and algorithmic magicians to build a truly transformative company that enables an easy way to create structured data from anything that is on the web. Throughout his career, Gary has served as a leader, advisor and board member to numerous technology companies with a strong track record of scaling their businesses to eventual exits.

Retailers can generate more business-critical insights than ever before by gathering and analyzing consumer purchasing web data. Web data is a valuable subset of the much-discussed-of-late category of “alternative data,” which refers to data obtained from non-traditional sources that can be used to inform and guide financial, investment, marketing, and a host of other business strategies. Web data is currently disrupting the payments industry – and retailers and consumers alike are benefiting from personalized data-driven experiences that create customer loyalty and increase brand touch-points.

Due to the drastic increase in online financial fraud in recent years, consumers and payments processors must actively monitor their purchasing history for fraudulent transactions. An IntSights report released in April found that the first quarter of 2019 saw a 212% year-over-year spike in compromised credit cards and a 129% surge in credential leaks. Further, research released in 2018 by Thales eSecurity found that 50% of all medium and large online retailers surveyed acknowledge that they had been hacked, a 250% year-over-year increase, and that these hacks can go on for months or even years at a time – allowing intruders to extract up to thousands of accounts and CVVs from online retailer sites in a single month’s time.

Web data is helping provide heightened levels of transparency in the payments industry, which is a crucial improvement with the significant increase in online fraud. The next generation of payments processors are using web data integration in the buying cycle to generate a more personalized transaction history for consumers using their online or mobile apps. These personalized transaction histories can be viewed on the payment processor’s website or app, and include specific information such as the name, price and image of the product purchased – eliminating any confusion caused by nondescript transaction details. For example, consumers likely would not connect their purchasing of a sports jacket at a store called “Cover Ups” with transaction detail that lists the payment as going to “RetCo – 431.” But, with an image of the product purchased clearly visible in the statement consumers can easily determine whether a purchase is fraudulent. Next generation payments processors use web data to integrate images of purchased products into online statements and mobile apps, creating personalized, transparent purchase details and a better overall experience for the consumer.

Modern payment processors are also enhancing the consumer shopping experience by using web data to suggest additional products that the consumer may also be interested in based on the product(s) already purchased within the payment app. This is important because consumers expect retailers to know their purchase history. A study released in May by Deloitte Digital found that 75% of customers expect brands to know their purchase history, and nearly 50% of customers love it when companies bring up their last interaction. This web data powered functionality gives retailers another touch-point with their customer, as well as a personalized, custom shopping experience for the consumer.

Consumers then can purchase these suggested products within their payment processor’s app – allowing the retailer to track the consumer’s in-app purchases of any related products. Creating a personalized shopping experience is vital, and retailers must use alternative data in every step of the retail cycle, including payments processing, to show the customer that they are understood and appreciated.

A highly personalized shopping experience not only shows the consumer that they are appreciated, but it is also effectively a win-win-win scenario for all three parties involved in the purchase process: the consumer, the retailer and the payment processor. Consumers are pleased with the easily accessible purchase information, as well as the suggestions of other products they might also enjoy. The retail merchant receives increased brand recognition and marketing value from the additional products that are displayed to the consumers following their purchase, as well as any revenue generated by the additional products purchased as a result. And the payment processor  enjoys higher traffic in their app by offering goods from any merchant that is a part of their network, earning additional profit on each sale that goes through their app.

Leading payments processors have already discovered the value of web data and are using web data to create a better experience for both the consumer and the retailer with heightened transparency to reduce fraud and personalized shopping experiences. As more payment processors integrate web data into their mobile and web solutions, more consumers will benefit from the “frictionless finance” achieved through customized digital user experiences while retailers build brand loyalty, increase customer touch-points and create the personalized experience consumers desire.

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