MasterCard Advisors LLC says its new service will provide more timely and accurate national retail sales figures than those from the Department of Commerce.
The professional services arm of MasterCard International plans to start offering the service, SpendingPulse, today.
The numbers will be derived from aggregate data using MasterCard’s payments network, Jim Thomas, its global practice leader of information solutions, said in an interview. The association processes about 6 billion transactions a year.
The Commerce Department releases three monthly retail and food service sales estimates: an advance number about the 15th of the month, a preliminary number about 30 days later, and a revised number in another 30 days.
SpendingPulse will offer clients revision-free data about a week before Commerce’s advance estimates, MasterCard said.
“Our locked-down number is one of the greatest values” of the service, Michael McNamara, the director of research products for SpendingPulse, said in an interview Friday. The service will “raise the bar for economic analysis” by providing forecasters with final data much earlier than the government.
To filter for credit card-specific variables, Mr. Thomas said, SpendingPulse will adjust its figures for seasonal card use as well as shifts from cash and checks to credit or debit spending. The data will also be normalized for changes in MasterCard’s account growth over time.
Scott Krugman, a spokesman for the National Retail Federation, said that even with the filters in place, some investors may be wary of retail sales numbers calculated by the private sector.
“We feel more secure with government numbers, since the private industry could have an agenda,” Mr. Krugman said in an interview.
MasterCard Advisors said the ability to get information from its parent’s payment network gives it a great advantage.
The government relies on a survey-based system, which involves lag time for responses, but SpendingPulse uses a network of customer information “that is not available to any other organization,” Mr. Thomas said.
MasterCard said it tested SpendingPulse over the past 18 months by comparing its monthly data with the final Commerce retail data, and the figures correlated closely with one another.
The Purchase, N.Y., company would not disclose the price of the service, which will be sold as a 12-month subscription. “We believe that institutional investors will see a lot of value in this, no matter what the nitty-gritty of pricing is,” Mr. Thomas said.
Mr. Krugman said his group’s economists would take a look at the service.
“To get an overall gauge of the retail industry, you look at all the numbers out there, but the litmus test will always be the Commerce numbers,” he said.
