MasterCard finds money maker in big data sales

MasterCard finds money maker in big data sales

Summary: The financial services giant says the sale of big data is a fast growing revenue area, with growth outpacing its payments processing segment.

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TOPICS: Big Data
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The collection of big data from credit card transactions may be one of the few scenarios consumers find benign enough to palate. For years consumers have relied on the data collected from debit or credit cards as a means to track spending, watch out for fraud or just to get a general sense of their finances.

mastercard

But as data becomes more of a commodity, card issuers and payments processing companies are realizing the potential for an additional revenue stream by selling that data to retailers, banks, governments or marketing agencies.

In a recent Reuters UK story, MasterCard's Ann Cairns, who heads the company's business outside North America, said the sale of big data is "an incredibly fast growing area" for the financial corporation.

The Reuters story pointed out that MasterCard revenue from "other revenues", the generalized area that includes the sale of data, grew 22 percent in the first quarter of 2014 to $341 million. For contrast, the payments processing segment — which is still MasterCard's bread and butter — only grew by 14 percent.

And while financial services companies hardly have the lock on consumer trend data, it seems as though they do have an edge on timeliness. Cairns said MasterCard is able to generate real-time data more quickly than the companies most interested in using it are able to do.  

Of course, Cairns said the data is scrubbed of any personal information, instead consisting of anonymous information that reflects spending habits and trends. Cairns noted how retailers have taken a particular interest in MasterCard's data.

"Retailers are fantastic at using the data they have available about how people shop in their store, how their inventory turns over, but what they don't know is what happens outside their store," she said in the article. "The data we've got is ubiquitous across the whole market. We can help retailers see what they need to do to capture more sales."

Although MasterCard wouldn't disclose to Reuters exactly how much money it's bringing in from big data (and calls from ZDNet were not returned), the company has been working to build profits in that area for some time. Last year MasterCard invested in and partnered with Chicago-based analytics firm Mu Sigma to develop and sell big data products.

At the time of the partnership Mu Sigma had a fleet of some 2,500 employees working on analytics problems for pharmaceutical, healthcare, financial services, insurance, consumer goods and retail companies.

Perhaps the partnership has started to pay off.

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Topic: Big Data

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4 comments
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  • As long as its scrubbed...

    ...I have no objections. The problem comes in if analysts start building models to predict things about people based on their buying histories (like political leanings, for example).
    John L. Ries
    • I agree John...

      However, something that isn't mentioned is the hundreds of data processing companies in between these credit card mongrels who prolly don't have the same size, integrity or rules to MAKE them srub data. An example that I can think of is state drivers license data. I know for a fact as being a former Army recruiter from the 80's, that they sold PURE data to companies and anyone with the dollars. Back then, the data was not scrubbed. I am sure there are many smaller credit processing companies who hold high earning on selling their trasnactional data.. basically for the right fee! As far as I know, they don't have any law, or regulation making them comply. It's all out of control and our Congress MUST set better laws and regs to ALL data holders. Right now, most think THEY own the data.. but it is YOUR data. I laugh at these companies who get hacked... and then come public to say we offer free credit review... otherwise, they are saying, we don't care! And the only rule I know of is timing. But then some of them don't comply to that either!
      SpankyFrost
      • i need some information

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  • Master card

    If you sale data you will to jail you cost me my first id theft that was wrong you need to pay us back
    ttx19