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.
