Credit card
processors do a lot more than facilitate payments between consumers and credit
agencies. The data generated during every transaction is an invaluable tool for
understanding consumer behavior and spending habits. Used effectively, this
information can help businesses reposition themselves as industry leaders. Even
at a low level, transaction data can also prove useful for spotlighting
suspicious activity and tackling chargebacks.
What is Card
Transaction Data?
Card transaction data
is a collective term used to refer to the payment data generated during credit
card processing. In the interests of privacy, credit card payments are sorted
into groups, with individual credit card holders remaining anonymous.
Card transaction data
doesn't just refer to credit card payments. In fact, it's a staple of many
different types of payment processing, including debit card transactions. In
the past, credit card processors have served as the
bridge between merchants and credit companies. Today, transaction data can now
be applied to wholly digital transactions that don't rely on a physical card.
Credit Card
Transaction Data Levels
Credit card
processing levels fall into three different categories, with individual
cardholders aggregate into one of these three groups. Cards classed as Level 1
generate exhaustive data during a typical transaction, while Level 3
transactions generate relatively little data.
Level 1
Level 1 transactions
are typically encountered in business-to-customer transactions. A typical
example would include a consumer using credit card processors to pay for an
everyday expense at the store or online. In the case of Level 1 payment
processing, relatively little transaction data is generated. It generally only
includes the transaction amount, the merchant name, as well as the date of the
transaction itself.
Level 2
Level 2 payments are
usually encountered with business-to-business transactions and are a staple of
B2B payments. Unlike Level 1 payments, they face stricter payment control
measures. They're commonly used by big businesses and government agencies to
monitor employee spending. While datasets are more exhaustive, Level 2
processing helps simplify B2B transactions. This results in expedited service
for customers and clients while allowing for more robust accounting.
Level 3
Typically seen with
high-level corporate spending and government agencies, this is the most
detailed level of credit card processing. As with Level 2 payments, Level 3
transactions allow for in-depth reporting. A dataset generated during a Level 3
transaction is substantial. It includes all the information found with a Level
1 and Level 2 transaction. In addition, information like product codes and
descriptions, order quantities, tax, and more are included.
Benefits of Card
Transaction Data for Your Business
All categories of
card transaction data can benefit businesses. At the lowest level, payment data
provides companies with oversight of potential transaction issues. Furthermore,
this data can be used to detect potential fraud. As well as making it easy to
unearth and stamp out suspicious activity, card transaction data can be used to
reduce the incidence of costly chargebacks.
It also makes it
straightforward for companies to hone in on specific datasets. This lets
businesses build a clear picture of the complete customer journey. By better
understanding consumer behavior, businesses can reframe their product and
service offerings. This protects existing revenue streams and helps businesses
identify lucrative growth opportunities.
Companies can also
use transaction data for competitor analysis purposes. By comparing your data
against the competition, you can determine the health of your operation. If
your volumes are falling short, you'll need to rethink the way you do business.
What to Consider When
Choosing a Card Transaction Data Source?
There are several
sources of credit card transaction data. Businesses can access consumer data
directly through point-of-sale, debit, and credit card transactions. These
sources tend to provide the most relevant insights for businesses looking to
stamp out fraud or tackle chargebacks.
Although useful for
businesses looking to assess the health of their operation, some companies may
find it useful to seek data elsewhere. Card transaction datasets can be readily
acquired from third-party suppliers.
For the right price,
companies can use this data to glean insights into their industry as a whole.
These datasets are particularly useful for carrying out competitor analysis and
can be invaluable for identifying untapped growth opportunities.
If you're focused on
fraud prevention and cost control, receipts from credit card processors should
prove more than sufficient. If you're eager to capitalize on new revenue
streams, it makes sense to source third-party datasets.
Payment processing
data is more than just a digital receipt of business transactions. Admittedly,
small to medium-sized businesses can use it for such purposes. However, there's
plenty of scope for monitoring fraudulent activity and identifying growth
potential. At higher levels, transaction data is an invaluable resource for B2B
payments. Allowing for in-depth monitoring and robust accounting, it's a must
for keeping any operation afloat financially.