Payment Data in the current digital age | 2020

13-11-2019 | The Blog Series

Payment Data In The Current Age

In the current digital age, we no longer question the importance and value of payment data. With a variety of public discussions and uproar surrounding data privacy (eg. Cambridge Analytica), the topic seems to become increasingly important.

If we look at the tech giants of the world; Google, Amazon, Facebook, Uber, Netflix etc. it is quite clear that these companies thrive on data. The data input by the vast number of users allows these companies to improve their business operations to such an extent that they have a major competitive advantage over others in their industry.

The benefits and use of data in the payment industry is no different. Companies such as Adyen, Amazon, Paypal, WeChatPay and AliPay all use payment data teams to outperform their competition and leverage this collected data to provide better services.


The Economist reporting on the value of data

Data In The Payments Industry

Payment data is collected, analysed, used and stored at various points during a transaction that is performed by core payment services (Cards, mobile wallets, ATMs). Originally, payment data played a vital role in offering security during the journey that transactions made to reach their intended destination. Nowadays, however, payment data can create economic value in the sector through the selling of this raw “payment data”, the understanding of data analytics and the implementation of these findings.

Furthermore, the data is used to create customer segments, statistical reports, provide personalised products and services, as well as recognise cross-selling possibilities, security and fraud related issues, and finally, to process payments and meet regulatory requirements. The value of data is obviously very clear. To get a better understanding of why financial data sets provide unique insights and why the companies that collect and process payment data have a privileged position, take a look at the picture below. Payment processing companies have insights into data that very few have. Along with that, they also have a broad view on other consumer and merchant data. This data, in the broadest sense, is obtained in two ways: Data is actively provided by the end users, or data is passively obtained.

Consumer and Merchant Data charts


The Key Drivers Of Evolution in Payment Data

Technological change has led to payment data being collected, processed, shared and used in digital form, at a lower cost, and on a larger scale than ever before. The ability to access this increasing amount of data, offers potential market opportunities such as business models based on collecting and processing data. This is all driven by an increase in computing power, affordable storage, and software that can analyse large data sets to gain new insights.

The changes in financial data collection is not solely driven by technological changes. We, as “end-users”, are a big driver of the increased amount of payment data that is available. With a global increase in the use of non-cash methods, the amount of payments data that is being generated is naturally growing.

Magazine FinTech Payments

Regulatory requirements within payments are opening up financial data to third parties. The most recent and disrupting development within the payment data sector involves open banking/PSD2 (Second Payments Service Directive), allowing 3rd parties to collect, process and share payment data (with customer consent). With PSD2, companies can now combine the individuals’ data with payment data, which is GDPR compliant (for now).

Big Techs and Financial Data

BigTechs are becoming increasingly active in the European payment landscape. With the precise information they already have on large amounts of personal data, payment data can give additional key insights into consumer practices and predilections. BigTechs such as Amazon, Facebook and Google have both a payment institution licence and an electronic money institution license. Allowing them to offer peer-to-peer payments. As of 2016, the Chinese Alipay also holds both licenses.

Should banks and end-consumers be afraid of these giants entering financial services, taking into account that they will be able to combine vast amounts of personal data with financial data? Or should we embrace the efficiency and innovation that BigTechs will bring to the financial services industry?

Consultancy, Recruitment and Marketing

Data Team for Payments

Taking the above information into account might have piqued your interest in building your own Payments Data Team. Are you also looking to gain a competitive edge in the payments industry? Can you leverage your data to increase the success of your business operations?

The question is, where do you start? Here is a list of general function titles focused on data that a payment company could consider:

  • Head of Data
  • Data Architect
  • ETL Developer
  • (Big) Data Engineer
  • Data Scientist AI/ML
  • Marketing Intelligence Analyst
  • Data Management Specialist
  • Project/Program Manager BI
  • Business (Data) Analyst

Curious to find out more about how leveraging financial data will help you gain a competitive edge? Get in touch here or find out more about Data Analytics specialised interim talent solutions.

About PaymentGenes: PaymentGenes is the leading global Payments & FinTech business services firm. Our team offers a unique style of personal service in recruitment and consultancy, enabling your business to grow. Learn more about how we can help your business here.