First Data Corp. is betting that card issuers would like to know more about who buys what from catalogues.
Last week First Data Infosource/Donnelley Marketing, a unit of the big card processor, signed an exclusive multiyear arrangement with Abacus Direct Corp., the largest distributor of information on catalogue purchasing behavior.
Abacus Direct will provide information gleaned from more than 600 catalogue companies on 88.9 million households. This will be added to the information on 106 million households First Data now has in its CardWise data base. Issuers will be able to access the information from many targeted lists.
Though issuers will always consider creditworthiness in targeting new customers, knowing their buying patterns will also become important, observers say.
"It's a lot better to send an offer to someone who has a higher probability of responding and then using the card, versus just sending it out to anyone based on a good credit rating," said Michael Geppert, senior vice president of marketing for First Data Infosource in Omaha.
"Banks are really interested in getting people to respond to offers, and Abacus has data that will enable us to do a better job of not only identifying responsive consumers, but also of knowing what offers to tailor to them," said Mr. Geppert.
"We believe we have information on 100% of the consumer-catalogue-buying households," said Karen Peck, vice president, corporate communications for Abacus, which is based in Westminster, Colo.
Unlike its competitors Total Systems or Electronic Data Systems Corp., First Data "is a strong player in the world of the merchant side as well as the issuing side," noted Frank Caruana, director of marketing systems at Danielian Consulting Group in Scottsdale, Ariz.
However, other companies are expected to challenge First Data's grip on the business of selling catalogue data to card issuers.
Potential competitors may include Fingerhut Cos., based in Minnetonka, Minn. Fingerhut has proprietary catalogue information on 30 million households.
Joel Friedman, managing partner at Andersen Consulting in San Francisco, said that issuers could also go directly to large catalogue companies such as L.L. Bean for consumer data.