How Pin Pads Power Payments Data

Marc Freed-Finnegan doesn’t think receipts are exciting.

What he does think is that they are is essential. “Table stakes,” he calls them, in terms of bringing value to a mobile wallet and giving retailers access to high-quality data necessary to improve the customer experience.

It’s this line of thinking that drives Index – a retail software company of which Freed-Finnegan is the co-founder and CEO – in its quest to bring the metrics and personalization of online commerce into physical retail environments.

Freed-Finnegan recently spoke with MPD CEO Karen Webster during which they discussed Index’s value proposition to merchants, its differences from and similarities to Apple Pay, and what’s next for the company.

Since Freed-Finnegan and Webster had last crossed paths at Innovation Project 2014, Index – which will be 3 years old in March – has zeroed in on enterprise-scale retailers as its target customers. The company seeks primarily to integrate with chains that have 100-plus stores and/or generate $1 billion or more in yearly revenue.

Index’s value proposition to these merchants is to give them better access to the data that helps them understand what customers are buying and then to help them make recommendations based on those preferences and past purchases to drive more and future sales. The integrated software’s methodology calls for capturing card data at the point of sale, tokenizing that data and using it as the means for attaching subsequent purchases and data to that token.

What, asks Webster, makes merchants trust Index to do that?

Says Freed-Finnegan: “We really look at Amazon as the backdrop for a lot of what we do.” Because its customers are logged in, Amazon has access to data that allows them to forge a unique and engaging shopping experience based in large part on recommendations – 35 percent of Amazon’s revenue, in fact, comes from recommendations – and fluid price adjustments.

“When you compare that logged-in experience to what happens in-store,” Freed-Finnegan continues, “it’s pretty anonymous. It’s tough [for a brick-and-mortar retailer] to know that [a particular costumer is] the person who spent a hundred bucks last week, or a few hundred bucks online, and we wanted to help change that. That’s what we’re doing with our partners.”

Noting that merchants are commonly quite reticent to give anyone other than themselves access to costumer data, Webster inquires as to how Index has dealt with that obstacle.

“We are a service provider to retailers,” states Freed-Finnegan. “They’re the customer, and we’re very clear about that.” Index, he explains, helps its customers collect their customers’ data in a unique way and use it to build a better customer experience and improve sales and profit margins – and that’s where Index’s relationship with a particular merchant’s collected data ends. The company does not share the data or do anything with it other than what is explicitly agreed to in its partnerships.

Acknowledging that Index does not deal directly with the consumer, Webster wants to know what is required on the consumer end in order for a merchant to access his or her data.

Freed-Finnegan describes that process as phase-based, all of it dependent upon the degree to which a consumer wishes to opt in. It ranges from anonymous card-usage reporting at the lowest engagement level, to a customer voluntarily sharing his or her email address, to – at the highest engagement level – a customer allowing for location-based marketing notifications on a mobile app.

Webster points to Index’s apparent similarity with Apple Pay, which likewise relies upon tokens and tokenization, and wonders what are the differences.

“We are not,” Freed-Finnegan says, “in strict terms, a mobile payments company. What we are [is] a data analytics and personalization company. And, actually, when it comes to payments, we’re agnostic about how you pay. Whether you’re swiping a card, whether you’re tapping or dipping a card, or tapping a phone; whether it’s Apple Pay or Google Wallet –  these are all just different identifiers for a customer.”

What is of primary interest to Index is to help its retailers understand every individual interaction between a customer and the retailer’s brand, and learn from it how to improve subsequent interactions on both sides: personalization for the customer and increased sales for the retailer.

Freed-Finnegan goes on to say, “What we do with our partners [is], we help put in place metrics not just to count dollars, but really to count customers – in effect, to measure their health.”

Taking into account the fact that merchants are only interested in one thing – selling more products to more people – Webster wants to know how Index helps them navigate the voluminous options, in the spaces of payments and data and mobile, to achieve that goal.

Responds Freed-Finnegan: “I think that…things of value don’t come for free. And I don’t specifically mean that they’re expensive in terms of dollars, but [that] they require a real organizational commitment to think[ing] really holistically…across finance and operations and technology and marketing, all in a common conversation.”

At the center of this drive toward holistic thinking, from the point of view of Index, is a piece of hardware that Freed-Finnegan attests is underutilized across many partners: the pin pad.

“Part of what’s exciting,” he says, “is…we can provide really best-in-class security for our retail partners, along with…really unlocking the potential of the pin pad to become a great point of really gathering data and improving the customer experience.”


New PYMNTS Report: Preventing Financial Crimes Playbook – July 2020 

Call it the great tug-of-war. Fraudsters are teaming up to form elaborate rings that work in sync to launch account takeovers. Chris Tremont, EVP at Radius Bank, tells PYMNTS that financial institutions (FIs) can beat such highly organized fraudsters at their own game. In the July 2020 Preventing Financial Crimes Playbook, Tremont lays out how.

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