Mastering Data

By Tom Steinert-Threlkeld  |  Posted 2002-06-17 Print this article Print

Mastercard thinks it can catch up to Visa. Its latest weapon: analytical tools it develops for credit card issuers.

Mike Bray was looking forward to his Memorial Day weekend last year.

But he wasn't planning a cookout.

He would spend all his time indoors, at MasterCard International's new operations center in a suburb of St. Louis. His mind was focused on 4 p.m. Saturday, May 26.

That's when three years of planning and building a massive new data center for the association of credit card-issuing banks would come to a head. What used to be housed in four floors in three buildings scattered around the metropolitan area would be expected to be operating smoothly in a single wing of a 525,000-square-foot, $135 million complex on formerly open land.

The association's top executives and Bray, its vice president of computer and network services, had chosen Memorial Day weekend because it provided one more day to recover in case something went wrong.

Bray's team had created a mirror copy at its new site of all the data that existed on Hitachi, Sun, Amdahl and IBM storage units, using a single tool from EMC. The crew arranged to have files sent from banks the night before. It tested the file transmission capability between the new site and around 200 of its key member banks.

The attention to detail paid off. When the moment of truth—the switchover—occurred that Saturday afternoon, nothing untoward happened. Bray was sitting on top of a 50 terabyte mine of data. That's 50 trillion numbers and letters of information. And members of the association barely noticed the change, continuing to clear and settle $4 billion worth of consumer purchases a day.

The around-the-clock value of this mound of information cannot be overestimated in the brutal, cover-every-bet competition between MasterCard and Visa for shares of member banks' business. "The credit card business lives and dies by data," says Ted Iacobuzio, director of consumer credit research for TowerGroup, a research and consulting firm in Needham, Mass., "because it pretty much determines revenue and profitability once a card is issued."

The aim of the data warehouse is to include every transaction handled for members over a three-year period, capturing the dollar amount, the card number, the location and the merchant in each instance. The system does not include names or addresses or information from other companies' databases, to protect individuals' privacy.

Survey data can be added in and MasterCard is looking internally at how to "model on top" of the pile with additional data such as ZIP codes. Demographic data, on incomes, ages and the like, are not part of the plan, according to Andrew Clyne, MasterCard's vice president of systems development.

But both MasterCard and Visa now are moving beyond just warehousing the data on spending patterns and providing reports to their members. In the latest phase of their rivalry, they are giving members such as J.P. Morgan Chase or Bank of America access to the data directly—and tools to analyze what they see, while they are online.

Tom was editor-in-chief of Interactive Week, from 1995 to 2000, leading a team that created the Internet industry's first newspaper and won numerous awards for the publication. He also has been an award-winning technology journalist for the Dallas Morning News and Fort Worth Star-Telegram. He is a graduate of the Harvard Business School and the University of Missouri School of Journalism.

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