Using a payments technology company's transaction gateway service, some merchants and product makers are creating promotions that can be tied to such details as an item's stock-keeping unit or serial number.

FreedomPay Inc. claims it is the only payments company it knows of that is providing merchants and manufacturers with "Level 4" transaction data, which goes a step further than most gateway operators and payments processors in the amount of information provided.

The Radnor, Pa., company's software lets retailers and manufacturers enter promotion guidelines. When a customer brings a product to a cashier, the item is scanned or entered and checked to see if it matches requirements for a promotion. If it does, the merchant's cashier can apply the offer to the sale.

"Say there's an interest-free financing promotion out there," said Aaron Callaway, FreedomPay's vice president of enterprise solutions. "In real time it validates … those products and says, 'OK, these are accepted for this promotion.' "

FreedomPay has seen interest in its reporting capabilities from a card association, but it said it is not working with any. The data could have applications for card issuers, too, as it can link promotions to use of a specific payment card to drive transaction volume.

In July, FreedomPay announced the availability of Level 4 data through its FreeWay gateway service, which connects merchants to acquiring banks or processors. It has seen most activity with equipment manufacturers and dealerships, especially in the agriculture market.

FreedomPay is trying to extend its reach by marketing its data-reporting capabilities to the fast-food, automobile, travel and financial services sectors, Callaway said.

Level 4 refers to transaction data categories generally defined in the payments processing business as Levels 1, 2 and 3. Each level includes a higher degree of detail than the previous one. Level 1, considered the minimum amount of data necessary to process a transaction, includes merchant name, sales amount and card account number; tax amount, a merchant's state and tax ID are among the details included in Level 2; and product code, item description and duty amount are part of Level 3. Other details FreedomPay says its system can provide that is of particular relevance to its users include make, model and part number.

"Our system … reviews it for all the various … promotions and responds in real time as to which specific items have qualified for promotions," said Sam Bellamy, FreedomPay's chief operating officer. "The cashier has the ability to provide that promotion immediately."

Payments analysts agreed that the degree of information included in what FreedomPay defines as Level 4 is more advanced than what commonly is passed through with a transaction.

"There's obviously a need for and interest in additional information in certain industries," said Beth Robertson, the director of payments research at Javelin Strategy and Research in Pleasanton, Calif. "I think the main thing is can they" share the information with customers in a way that makes it easy to "leverage that data properly and effectively."

Robertson and Brian Riley, a research director at TowerGroup in Needham, Mass., also said lower levels of transaction data do include information about purchased merchandise. Riley questioned whether retailers or manufacturers need such information.

"If they're a Twinkies buyer, does it really matter to me if they get the 4-ounce or the 8-ounce" package? Riley said. "If it's a Hostess product less than a dollar, that means something to me."

Visa Inc. and MasterCard Inc. did not make executives available for an interview about their ability to view and provide various levels of transaction data. But representatives for both payment networks said the ability to ferret out item specific information exists.

A Visa spokeswoman said by e-mail that in some industry segments, including airlines and hotels, the company sees "a great deal" of Level 3 data, but typically from commercial card purchases.

"We seldom see data passed for consumer cards due to business-case realities, which keep these delivery levels relatively low," the spokeswoman said. It also depends on whether a merchant chooses to provide such information, she said. Visa has the ability to match SKU-level data and other details and can pass it through the payments system when interest exists from retailers and merchants, she said.

Bellamy said that by providing a product SKU or serial number, FreedomPay's merchant and manufacturer customers are better able to tie financing offers and other promotions to specific products. It also helps in inventory management and can help in trying to sell excess inventory.

For instance, a manufacturer may offer 0% financing for 90 days on certain lines of equipment. The challenge for the dealership or merchant selling the products, especially in transactions involving multiple items, is ensuring the parts a customer is buying qualify.

In some instances, a dealer may apply one manufacturer's financing promotion to some products that don't qualify, including ones produced by another manufacturer. "FreeWay is able to validate the item-specific details to ensure it is eligible for the promotion," Callaway said.

Item-specific data also is useful when trying to drive product sales with specific customers.

However, unlike some promotion management systems that tie the generation and presentment of offers to the use of a specific payment card brand, FreedomPay focuses on the merchandise itself, making the method of payment irrelevant in some scenarios.

Additionally, Bellamy said one advantage of FreedomPay's technology is that it can integrate with multiple point-of-sale software programs, inventory-management programs and payment terminals. That's a benefit to midsize merchants, who may be using different types of terminals and programs at different locations, he said.

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