How payments and analytics deliver customer insights and drive loyalty

It’s well known that it’s more cost effective to sell to existing customers, than it is to acquire new ones. If businesses can gain extra insights into how their customers use their services, they can find new ways to tailor and customise those services to individual customers. Electronic payments make the interaction with a business a far smoother, quicker and convenient experience for customers – tapping into that by implementing electronic payment methods can have a real pay-off. One example of an electronic payments success story is from Starbucks, which claims that more than 10% of its in-store sales are driven by its mobile wallet app.

The data acquired through electronic payment systems, and the many mobile transactions that are happening through payments apps are a gold mine of customer behaviour. A few payment providers are using this data to analyse spending patterns based on the locations and pro-actively engaging with the customers. One has to only look at a company like PayPal, that has over 100 million credit cards on file, to start to understand exactly how much data electronic payment providers hold and how valuable that data might be, given that it can offer insights into such a large numbers of customers’ behaviour.

Using the data gleaned from payment systems, banks and payment providers can better understand the spend pattern and location of consumer behaviour, which if acted upon can present opportunities to increase customer spend and loyalty at the same time. Here’s a scenario for increasing loyalty amongst commuters – you could have a payment app that analyses the data of the various journeys a person takes on a tube. If that customer was to travel a particular route every day of the week, the app would use this data to work out the best possible cost options; a Weekly Pass, Monthly Pass, or PAYG Oyster. The payment provider’s app could then ping the customer with the most cost effective option, which could be purchased through the same app. In an example like this everyone wins, the traveller saves money and it greatly increases his loyalty towards the payment provider.

While using the data from electronic payment systems cans boost loyalty, there is no magic formula to it – loyalty will always be about trust and advice. But what banks and payment providers have been able to tap into is the use of data analytics and mobile payment analytics through geospatial applications and innovative partnership models. Using technology to create innovative rewards for customers, banks and financial providers can build all-important trust by saving the customer money.

The article was originally published on The Digital Banking Club on July 29, 2014 and is re-posted here by permission.

Sameet Gupte

Senior Vice President, Global Head of Banking and Financial Services and Managing Director, Europe, Virtusa. Sameet Gupte heads Virtusa’s Banking and Financial Services business unit globally. He holds additional responsibility for Virtusa's business operations in UK & Europe. In his professional career Sameet has lived and worked across USA, Asia, UK and Continental Europe. In his current role, he is responsible for building and executing the strategy for Banking and Financial Services globally. This includes driving significant revenue growth and profitability by building industry leading domain solutions. Sameet joined Virtusa in 2012 and is based out of London. In his previous role, he was responsible for growing the European business significantly for Virtusa across all Industries. Prior to Virtusa, Sameet spent 12 years with Headstrong where he lead and built successful businesses in North America, Europe and also served as the joint Managing Director for the ioint venture in Germany. Prior to Headstrong, Sameet worked with NCR Corporation and HCL in Asia. Sameet completed his Finance and Accounting Executive Program from Stanford Graduate School of Business in California and has a degree in Computer Engineering from Pune University.

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