MasterCard finds money maker in big data sales

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

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.


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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