The Importance of Data in Payments, An Interview With CMSPI's Data Manager

Why is data in payments so important?

“Data plays an extremely important role in the way a transaction is taken. From the POS/terminal, through the entire payments supply chain (including your gateway, processor, network, issuer, etc.), to the analysis and trends after the payment is accepted or declined – data is key to understanding that transaction journey.

In terms of why it’s so important in payments, it allows merchants to understand how they are performing across different metrics. Without reliable and regular data, merchants are unable to assess their performance with any degree of accuracy.”

Tell me about CMSPI’s unique data lake…

“What makes CMSPI’s data lake so unique is the access we have to data throughout the entire supply chain. Processors have their own data they can analyze, issuers and networks can do the same, but what we’re able to do at CMSPI is look at data from across the supply chain and life cycle of a transaction – including the approval/ authorization stage, the cost stage, providers, and chargebacks & fraud.

Independence plays a huge factor in this as we present the data and trends as they are – we have no agenda other than presenting the facts accurately.”

Why is standardization so important when comparing data across your supply chain?

“Standardization is probably our key USP when it comes to our data team. The only way merchants can truly understand their suppliers performance is accurately comparing it at all stages of the transaction life cycle. All suppliers are compared on an equal playing field. This standardization means we can slice the data equally and assess findings in a standard way.

Reporting received from your suppliers can often be misleading. It can be skewed to boost the suppliers own performance, but at CMSPI we’re able to break that down and accurately show supplier performance as it is – both throughout your estate, between matching company profiles, and nationally.”

How much data do you analyze on a weekly basis?

“It would be fair to say we are currently analyzing billions of transactions per week across the entire transaction life cycle. This number is growing all the time, and it’s a really exciting time to be part of this data team.”

How do you collect data?

“Good question, we primarily use three main methods when collecting data: secure file transfer protocol (SFTP as it’s more commonly known), APIs, and report scheduling. One of the most important things about collecting data from our clients is that we want it to be as hassle free as possible. Many of these methods require little to no resource from the merchant – it’s something we can liaise directly with suppliers about.”

What is the difference between the data a merchant’s supplier has compared to CMSPI’s data?

“I think the biggest difference is the breadth of data we have, as well as the depth. We not only have the merchant’s data, but we also have data from hundreds of merchants across the globe. This allows us to benchmark our client’s performance against other merchants with matching profiles using granular characteristics.”

What kind of trends can CMSPI’s data lake highlight?

“Lots of exciting stuff! For example, we’re able to look at the impact of things like regulation over the course of years. In the U.S., we’ve seen some very interesting trends when we look at the macro level view of things like the Durbin amendment from 2011. Being able to look back over years worth of data is so interesting for merchants, and unique to CMSPI – suppliers often only offer data insights from the last 12 months.

We are also able to look at new and emerging payment trends, like the rise of alternative payment methods such as WeChat Pay and Alipay. We can also track issuer volumes over time, PINless enablement in the U.S., the rise of certain false declines, fraud changes during COVID, the switch to ecommerce, contactless, tokenization and its effect on approval rates – the list goes on! We’re able to drill down and analyze any and all factors that affect cost and approval rates for merchants – and ultimately significantly increase sales.”

What are the benefits to merchants working with CMSPI and the data team?

“Probably the biggest benefit to working with CMSPI is that sometimes merchants just don’t know what they’re looking for in their data. We have that expertise and knowledge. We know exactly what to data we need, how to get it, how to combine and standardize information from multiple suppliers, and how to take that data and transform it into insights that will positively impact a merchant’s payments arrangements.

As I mentioned earlier, another major benefit is that we can benchmark performance against others in the merchant community. Merchants can not only compare their own performance over time, but they can also access if that’s competitive in the industry – a game changer when it comes to making sure your arrangements are industry-leading.”

Can you tell me a little about CMSPI’s DOT software?

“DOT (our Debit Optimization Tracker) is focused on tracking incentives – making sure those incentives are met, advise when to switch order of routing transactions, and optimizing the cost per transaction a merchant is paying. It’s a great tool for assessing the number of transactions being converted to PIN or PINless, and for being able to compare across your estate.”