Unlocking growth through card-not-present transactions

Article contributor / Brooke Jacobson / Data Analyst, Market Intelligence & Data Analytics

Card-not-present transactions continue to increase in the marketplace and offer an opportunity to grow non-interest income through interchange. These transactions can be e-commerce transactions, as well as recurring and installment payments and money transfers.

Analyze transaction data

You can use transaction data to understand your customer’s usage of your debit card on these channels and monitor the impact of resulting messaging and marketing campaigns.

Analyzing this data can help answer questions such as what percentage of your current point-of-sale transactions originate from card-not-present transactions? What is the trend overtime?

The bar chart below is an example that shows the monthly number of point-of-sale transactions, along with the percentage of those transactions coming from card-not-present transactions, over a six-month period.

Understanding current usage in these channels, along with historical trends, provides additional insight into your debit card portfolio. Since card-not-present transactions are growing in the marketplace, you should expect to see them grow within your portfolio as well.

Compare transaction data

Along with analyzing your own data, comparisons to a peer group can help identify opportunity gaps. Using e-commerce as an example, we know consumers are increasingly shopping online. You can reasonably assume your customers are doing the same. Are they using your debit card when they shop online? We can use a comparison to a peer group to answer this question.

The example below compares an institution’s monthly e-commerce transactions to the average monthly e-commerce transactions of other SHAZAM^® customers with a similar number of cards.

Use your data insights

If your institution is consistently capturing a smaller number of e-commerce transactions than other institutions with a similar number of cards, like the example above, you have an opportunity to grow these transactions and increase your interchange earned. If not, you’re performing well compared to your peers and action might not be needed depending upon your current goals and priorities.

If you identify an opportunity gap relating to e-commerce or card-not-present transactions in general, a campaign to promote the use of your debit card in these channels can increase transactions and interchange income. However, this is an area of opportunity that unfortunately comes with increased risk. Card-not-present transactions do come with increased rates of fraud, so monitoring fraud data along with card-not-present transaction trends can help balance opportunity with risk.

Streamline data reporting

Could you use support compiling and summarizing your data so you can focus on the trends in your debit card portfolio and the actions you can take to increase revenue? SHAZAM^® Business Intelligence Services™ can help. Contact your client executive to schedule a product demo.