Credit Card Analytics

Credit Card Analytics: Overview

A credit card product has created an important revolution in payment industry. It has an impact across industry and customer groups. It has given a flexibility and ease of payment to the card holders.65% of all payment transactions are made using Credit Card is North America in the year 20111. Similarly other regions also have majority of the transactions being made using Card. And the contribution of credit card payments is going up across regions.

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In a credit card transaction and payment process, multiple entities are involved such as Card Issuer, Merchant Acquirer, Merchant, Card Holder and Network Provider.

Based on credit card transactions and payment, all these entities carry out different type of analytics.

Merchant Acquirers use data analytics to partner with merchants for growing and retaining merchant list.

Customer transaction and payment behavior provide good indicator of customer preferences and needs. Merchants employ transaction and payment behavior to understand about their customers and improve loyalty & income and manage risk & operational costs.

Network Providers (e.g. VISA and Mastercard) leverage insights from data analytics for helping their partners or members in acquiring right customers, building balances, improving profitability and operational efficiency.

A card issuer reply on analytics for creating new credit card propositions, promoting spend on its card, improving Net Interest Margin, Measuring & Managing portfolio risk, improving operational efficiency and growing the card business.

Prospects:

Acquire new customers who are more likely to be profitable and can be acquired cost effectively.

Customers:

Monitor and migrate customers to higher Profitability and CLTV.

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Reference:

1. http://www.capgemini.com/resource-file-access/resource/pdf/wpr_2013.pdf