Data is the key to understanding the customer and the long-term success of any business, so it’s no wonder it’s a sought-after commodity. Accurate and detailed data not only unlocks the door to further business growth, but also to increasing customer satisfaction.
Payments data is no exception and this is true for established banks and new players in the financial market. In order to make the data actionable, it needs to be cleansed, categorised and put into an understandable form. This is where enrichment comes in. Learn how to choose the right partner for payment data enrichment
Simply put, data enrichment is the extraction of additional information by linking existing data to external sources without having to ask the customer for it.
Payment data enrichment allows companies to learn more about their clients; the more data they have, the better business decisions they can make. Both the companies offering payment services (new business opportunities, easier fraud detection and risk assessment, better customer experience, etc.) and the clients themselves (easier budgeting, saving, etc.) benefit from enriched data.
The good news is that there are already a number of data enrichment solution providers on the market today, so there are many to choose from. But how do you identify the right one for your business?
Let’s take a look at 6 criteria you should consider well before you shake hands with your new provider.
As tempting as it may seem to build your own payment data enrichment tool, it doesn’t pay off in the vast majority of cases. Building an initial merchant knowledge base is a time and human resource-intensive task, takes a company away from its core business, and ultimately costs more than an external solution. Not to mention the effort that must be devoted to updating the information afterwards (adding new merchants and removing defunct ones, changing store addresses, new logos, etc.) and re-recognizing merchants after replacing payment terminals, which is done every few years.
While building your own solution can take months, deploying an external one is usually a matter of a few days. Working with a third party is therefore the only way to go for the vast majority of companies when it comes to enriching their payment data.
Naturally, when choosing a partner for payment data enrichment, the first consideration is the data itself, its quality and how much and what additional information the provider is able to offer based on the input data.
The payment provider also supplies some data by default i.e.:
Any additional information (website, opening hours, phone number, customer reviews, the carbon footprint of the transaction…) is a big plus and opens up additional opportunities for the business. While some can only enrich a fraction of the data, others can handle most of it. But be careful that quantity does not come at the expense of quality. In the hunt for 100% data enrichment, some providers are literally shooting from the hip, and you can clearly see that in the results.
Since it is impossible to make good business decisions based on flawed data, a company should also be concerned about the quality and timeliness of the data provided. The data must be accurate, static knowledge bases are not acceptable for payments, and a combination of several different sources and algorithms for drawing and updating data is always ideal. It turns out that relying only on MCC codes (merchant codes) for data enrichment does not pay off: in fact, the error rate of the information is often as high as 50 %.
In most cases, data enrichment as a service works on the principle of APIs, which require data to be shared with third parties.
To start off, the solution under consideration should not require the sharing of any personal data of clients, but only the basic identifiers of individual payments. Its provider should then comply with the General Data Protection Regulation (GDPR) and ideally be ISO 27001:2013 certified (international standard for information security management systems).
The payment data enrichment solution must be quickly and easily integrated into the company’s existing systems. The most common solution is the aforementioned API, which can be worked with in several ways (calling at the moment of data creation, at the moment when the client requests it with his activity, for example in the application, continuous storage of available data in the company’s systems, etc.).
It is therefore necessary to clarify what the company expects from data enrichment, how it wants to handle the data and whether the provider is really able to help it.
As already mentioned, in-house solutions are often expensive and often fail, so they are not suitable for the vast majority of companies.
However, even with outsourced tools, it is important to consider what the company is actually looking for. The cheapest is not necessarily the best and looking at the value for money that the chosen solution will bring to the business is definitely worthwhile.
In addition to the criteria mentioned above, there are other things you can look at when choosing a payment data enrichment partner. How long has the provider been in business? How much data has it enriched (and how well)? Who are its clients? And last but not least: what markets does it operate in and is yours among them? If a company is successfully enriching data in several markets, it can be assumed that it will be able to add more markets where, for example, no one else offers the service yet.
The more “experienced” the provider, the better the quality of the knowledge base and the more sophisticated the data enrichment methods, (usually). The more markets, the more likely yours is (or could be) among them. The bigger and more well-known the clients, the better the guarantee that you too have found the right partner for you.
Trust but verify. Don’t rely on a pretty presentation when choosing a data enrichment partner, but look at the integration itself and verify the quality of the data it provides first-hand.
Don’t kill two (three, four…) birds with one stone. As tempting as it may be to get one provider for several services at once, focus on just one when it comes to data enrichment. This will prevent you from ending up with several incomparable or barely comparable bids, or only one competitor in the tender.
TapiX has been on the market for over 8 years and offers tailor-made solutions for financial institutions (banks, fintechs, payment startups). It has enriched more than 5 billion transactions for clients like Raiffeisen Bank, UniCredit Bank, bunq, Twisto and others. The cloud-based TapiX API can be integrated in a matter of days. The company is GDPR compliant and ISO 27001:2013 certified.
Dateio, founded in 2013, is a fast-growing Czech FinTech with a mission to bring deeper insights to the modern banking consumer. What started as a platform of card-linked offers has become an integrated solution for banks to help retail banks significantly improve their customers’ user experience.
Today, Dateio is a banking partner to several top banks in Europe and the Middle East, where it helps millions of users offer added value through an enriched transaction data and card-linked marketing platform. At the end of 2021, Dateio was awarded a Deloitte Technology FAST 50 CE and named the fastest growing Czech company by the Financial Times.