Tranzlogic LLC is targeting independent sales organizations to scale its customer intelligence and marketing strategy more quickly than it could by selling to end users.
"Instead of delivering directly to merchants, we could reach a larger number of merchants by enabling ISOs to make credit card data available to its merchant clients with a white-label platform," says Charles Hogan, CEO of Tranzlogic.
Tranzlogic supplies its ISO clients with consumer spending data. The data is stripped of identifying details such as the name and address of the user, and is then aggregated to show merchants consumer patterns based on demographic, economic, psychographic and geographic features.
Two ISOs have rolled Tranzlogic's system out to about 10,000 merchants so far, Hogan says. Ten more ISOs, representing hundreds of thousands of merchants, are in implementation. Hogan would not name any of the ISOs the company has signed on, but said announcements should come toward the end of April.
"ISOs can act as a distribution channel for Tranzlogic allowing [the company] to reach a larger number of end users," says Arkady Fridman, senior analyst at the Aite Group. "This model seems to strive for scale by shifting the sales channel to ISOs as opposed to individual sale efforts."
Plus, as ISOs have trouble differentiating themselves in a cutthroat market overflowing with new technology, they may take to offering a added-value product such as Tranzlogic's, he says.
"Merchants that are looking to consolidate the number of providers they have may welcome new analytics features," Fridman says.
Big data and transaction analytics has become an important part of payments player's business model recently. Many companies, from marketing firms to mobile wallet startups, are touting easy access to consumer data to make merchant ads and offers more effective.
"Most merchants don't know much, certainly not empirically and certainly not anecdotally, so their marketing is less efficient as a result," Hogan says.
But merchants are willing to switch credit card processors at margin to get this data, he says.
Fridman says Tranzlogic's offering looks like a traditional big data play, but takes a different approach by targeting ISOs. Womply Inc., a San Francisco-based company, markets similar data analytics plus loyalty programs to its ISO clients.