I just attended NACHA’s Council for Electronic Billing and Payments and I’ve come away with an even firmer opinion that this payments business I’m in isn’t about payments. It’s about data.
A retail payment transaction has the potential to throw off a lot of valuable information: what you bought, what you bought along with it, when and where you bought it, how much you paid, what method of payment you used to buy it, etc. This information is hugely valuable to a whole ecosystem of companies, each of which is dying to spend money to better understand consumer’s spending with the exclusive goal of throwing them relevant and compelling offers to encourage even more spending. Merchants want this, of course, but also manufacturers (thing Sony) and CPGs (think Unilever).
This is why mobile commerce — not mobile payments — is so exciting; it holds the promise that your smartphone can, given your agreement to the terms and conditions that you never read, provide these interested parties with the data they need to get you those offers and deals you can’t resist. This should be win, win, win. For the manufacturers, more targeted ad spending. For the mobile app provider, a lucrative revenue source. For the consumer, offers that actually are interesting and compelling — instead of the assorted junk that is presented today.
But what about B2B, isn’t that all about payments?
Well, one of the presenters at the NACHA conference talked about using rent and mobile phone payments to build credit scores for no-file and thin-file customers. Wouldn’t having insight and access to a whole set of newly enabled credit buyers be interesting? Handset manufacturers, IKEA, but maybe even Citibank, might want to place a low credit line card into a customer’s hands. That’s turning payment data into new top line sales, a beautiful thing!
So what about P2P – can we say that’s all about payments? Maybe, although I’m not exactly willing to give up on that one yet.
I’m sure that gleaning the information from P2P payments data, such as on a person in India who is a regular recipient of money “wired” home, is valuable to someone who might want to extend credit or otherwise market to that recipient. But I’ll think more on that one.
I’m a payments guy, but I realize I’ve got to get smarter about the business of marketing analytics and ecosystem of providers in this space, especially how they work with manufacturers. This is the stuff that’s going to be at the bottom of a lot of things that we think of as payments, but is really the business of data.
To take a deep into how data in payments is working today and where it is going, check out our Data in Payments Insight Workshop.
This post was written by Glenbrook’s Jay DeWitt.