I had the pleasure this week of participating in a couple of live IBM Academy of Technology events - the first for me in several years. It was great to reconnect with some of my colleagues, and get a chance to talk over IBM technology and client engagements.
Our academy president, Rashik Parmar, had arranged for a session with Bill Gajda from Visa. Bill's role at Visa includes mobile strategy as well as global innovation. We had a frank and open discussion about Visa's use of data, who their customers are, and IBM's technology role.
Please note that any errors in here are likely mine, I didn't take notes, I was far too engaged and inspired thinking about all the data (!) during the discussion.
Clearly, credit card transactions are "big data". I don't recall the exact numbers, but here's an article from over 5 years ago which references 300 million transactions a day. Bill Gajda told us that Visa keeps around 5-7 years of past transactions. They primarily use this information for real-time fraud scoring of individual transactions. So, when you charge something, Visa gets the approval request, and attaches a score which indicates the likelihood that the transaction is fraudulent. This is based on several factors, such as your usual spending patterns and the location of the transaction. That is the primary use for the historical data. Bill also told us of a partnership they did with The Gap, where if a Gap customer in their loyalty program opted in with their phone number, Visa would tell the Gap when a purchase was being made nearby a Gap store, and then The Gap could text an offer to their customer for a discount at the Gap. I was able to find an article describing that, and was surprised to see it was from 2011! Now, if you're a geek like me, you'll think for a second about how the data flows. (This is just Peggy speculating, I have no further knowledge of the internals of this...) So say you charge your lunch on your Visa card, and the approval data flows to Visa, then after Visa processes the approval, it also looks at the zip code and compares it to a list of zip codes it has from The Gap of their store locations (I'm making this easy by Zip code rather than a lattitude/longitude based proximity lookup). When there's a match, Visa initiates a message to The Gap to tell them you're close to a Gap store... and Gap then sends you a text message with a promotion. Phew! Do you think Visa also has a indicator on your credit card that you're a Gap customer? They must... I can't imagine they do this on "every" Visa transaction... ! Actually, I guess there is "Gap Visa" card, so it's probably those which are targeted.
I don't know about you, but I have fun thinking about this kind of stuff. Some other interesting facts I learned are that Visa doesn't have your name or personal information - that data all resides with the issuing bank. One of my colleagues asked Bill Gajda whether if a person has multiple Visa cards, does Visa have information across the cards. At first, he answered "yes", but then with another colleague's question about matching the names, he said "no" - Visa has no idea that you are the same person when you have multiple cards. Interesting thought about whether we could perhaps match spending patterns to identify who might be the same person? That might not be something Visa wants to do, of course, I was thinking of it more as a theoretical exercise. Also, Visa doesn't really consider cardholders customers, despite its advertising budget - its customers are the issuing banks and the accepting retailers, so they are the ones who would be likely consumers of the volume of data or aggregated insights from it. Tho I guess the banks already have it, too.
In any case, again, data about people and their habits is big data and big business. I personally don't find any of this "scary" but I guess some people might. I just like people, so data about people is interesting data to me. I might those who do find it scary might just have to take a closer look at some of those tiny print privacy agreements!
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