Payment firms for years have offered card data to support their business clients' strategies, a concept JPMorgan Chase hopes to outdo by tapping its own card operations.
To help merchants improve their marketing, pricing and staffing strategies in a tightening economy, Chase this week began sharing deep insights about shoppers' habits gleaned from two streams: its U.S. massive consumer card-spending database and huge national card-processing operations. The new resource, called Chase Customer Insights, rolled out this week after months of testing to Chase small-business customers and users of QuickAccept, the newest version of its small-business card acceptance service, according to Brad Brodigan, head of global SMB payments at Chase.
The bank is offering the product as fears of an economic downturn increase among small businesses. 57% of small business owners in May predicted the economy will become worse in the next year, according to the advisory firm
“Small businesses can use this [card] data to figure out exactly where to set prices and store hours and staffing–for example, how many people need to be on duty? Do they need to stay open later? Do they actually need to be open on Mondays?" Brodigan said.
The bank is betting its trove of data can be a competitive differentiator against other card issuers and payment technology firms that offer merchant services to businesses, such as Fiserv's Clover, Block and Stripe. As the largest U.S. bank by assets, at nearly $4 trillion, Chase commands the highest number of payment cards, with
The new service harnesses anonymized customer card and purchase data so small businesses can compare their own customers' demographic details and shopping habits with those of nearby rivals through a dashboard with tools to apply the insights to refine advertising, operations and loyalty programs.
“We based this new service on two very large data sets that Chase is uniquely positioned to provide—our large card transaction-processing business that generates data on the merchant acquiring side, combined with our base of card transaction data from individual Chase card customers,” Brodigan said.
By combining cardholder data plus individual store sales, merchants can see details such as their typical customers' income, ZIP code and their routine mix of purchases including ticket size and shopping-trip frequency.
The data is based on net settled sales within the last week, and in upcoming months Chase plans to shorten that timeframe, providing data within 24 to 72 hours of sales. Chase small-business banking and card-processing customers may access the data through existing banking portals with no added fees.
The dashboard provides a weekly summary of customer spending patterns comparing an individual business’ sales results to those of nearby businesses in similar niches.
The service targets businesses like restaurants, brick-and-mortar merchandise stores and services like plumbers and electricians to help merchants pinpoint opportunities to boost sales and improve efficiency, Brodigan said.
Large retailers tend to have their own proprietary customer data, but small businesses typically only have access to generalized local sales data, according to Brodigan. He contends that Chase’s access to details about actual card customers in the area sets its shopper data apart from rivals.
“By being able to use two sides of our data, we're able to provide merchants with some deeper insights about their customers and their peers' customers," Brodigan said.
Chase’s move underscores the growing urgency for banks to compete with fintechs by leveraging and monetizing data that has mostly been untapped until now.
“I think we’re seeing the way banks are expanding outside their traditional services walls into actually monetizing data for two reasons — first, banks like Chase are sitting on planets full of data, and second, organic growth must come from proactively pushing these benefits out to customers,” said Patricia Hewitt, a principal with PG Research & Advisory Services.
Making richer business-management data easier for time-pressured small-business owners to utilize could be a winning strategy, as long as it’s effectively marketed to end users, she said.
“The danger is that banks continue to make features available and then wait for customers to find them. If there’s not real attention paid to the value customers are receiving with this data, these initiatives could fail,” Hewitt said.
