Visa Enables Merchant Campaigns Customized to Single Cardholders

Visa U.S.A. today announced that starting in October it will begin tracking cardholder transaction data at the full 16-digit account number level, allowing issuers and merchants for the first time to target unique promotions and other marketing campaigns at individuals. “Now we can enable [marketing to] a cardholder of one,” said Elizabeth Buse, executive vice president, product development and management, at Visa. Merchants in a wide variety of industries will be able to take advantage of the new capability in a program called the Visa Incentive Network, Buse and other Visa executives said today at a one-day conference the bank card association sponsored in New York. The innovation is the most recent of a spurt of system and software upgrades at Visa that have, among other things, allowed the bank card network to accelerate authorization times, streamline chargebacks, and add more data to standard authorizations. With the new capability, Visa's network can link cardholders' transaction history to 16-digit account numbers, going beyond the current ability to match such data to anywhere from six to nine digits, which might describe large blocks of cardholders. Matching to 16 digits will allow merchants to customize discounts, rebates, and other rewards to households, and in many cases to individuals, Visa says. Visa began testing the system with Marriott International Inc. and Saks Inc. and expects a number of other merchants to adopt the program. By Oct. 1, the card company expects 50 million accounts will be available for individualized rewards programs. While customized rewards programs linked to transaction data have been deployed by American Express Co. in the travel industry, Visa says it is aiming the VIN program to merchants of all types and sizes. “VIN will give mainstream cardholders offers at merchants where they shop [every day],” said Buse. The new marketing capability follows other programs that have resulted from Visa's massive overhaul of its worldwide processing network. These upgrades have included a new, IP-based gateway to VisaNet, the company's backbone network, that relies on new software to cut authorization times to 1.4 seconds on average. The network has also introduced a new, enhanced authorization system that relies on neural networks and larger sets of cardholder and network-wide data to more accurately calculate the odds of a fraudulent transaction at the time the payment is being processed. Other improvements include a new, image-based system for handling chargebacks, called Visa Resolve Online, that has cut resolution time in half from the old, paper-based system, reduced the number of reason codes from 40 to seven, and saved acquirers and merchants $540 million last year, Visa says.