We’ve all seen them – the stickers of credit card company logos on cash registers and storefront windows indicating that they accept X and Y credit cards. But here’s something you probably don’t think of (unless, of course, you’re in the credit card industry) – how do credit card companies ensure merchants continue to accept and process their cards’ transactions? Merchants can choose which cards to accept, and it’s a competitive market for credit card companies to remain on a merchant’s list.
I caught up with Anand Narasimhan, Director of Decision Support and Analytics at Discover, and learned that his company is using an approach based on predictive analytics to improve merchant retention rates. He’ll present on this innovative strategy at The Premier Business Leadership Series in Las Vegas soon, and I’ve asked him for a glimpse of what he’s going to say:
1. Tell me more about what you’ll present at PBLS.
I’ll speak about Discover’s approach using predictive analytics to improve merchant retention rates. In the credit card payments space, merchant attrition is major challenge, with an average of 16 percent of merchants changing acquirer processors (the non-bank service firms that handle credit card transactions from the merchants) annually, costing the industry $2.3 billion a year. Most organizations have expensive, inefficient retention programs to address this trend and they may be interested in Discover’s efforts that have seen success.
2. Why is this issue a hot button for you right now?
Innovation is a key area of focus for Discover. Through the innovative product we’ve developed and our partnership with the acquirers to implement, I foresee a game-changing moment for Discover.
3. What is one thing you hope other business leaders will take away from your presentation?
Everyone has lot of data, regardless of their industry. We are all busy trying to support internal functions, which means that, while all data has value, some of that value gets lost when we fail to consider external factors. Discover’s work is an example of an analytics strategy that incorporates external components to address a substantial challenge that the payments industry faces.
Check out the full presentation at The Premier Business Leadership Series in Las Vegas, Oct. 9-11.