Banks Put Transaction Data to Work in Commerce Media

Financial institutions are increasingly investing in commerce media, leveraging transaction data to create new revenue streams beyond processing fees. Citi launched Citi Commerce Media on September 23, utilizing insights from over 70 million U.S. customers and 6.5 billion annual transactions to assist advertisers in understanding their target audiences and evaluating campaign effectiveness.

This move joins other industry players such as JPMorgan Chase, Mastercard, and FIS, all utilizing transaction data to target and measure the success of merchant offers and advertisements. Commerce media differs from retail media in that it encompasses a broader range of participants, including financial institutions, payments networks, travel companies, and digital platforms.

While retail media is typically confined to a single retailer's ecosystem, commerce media spans multiple merchants, industries, channels, and consumer touchpoints. The use of transaction data provides advertisers with valuable insights into consumer behavior without revealing individual product purchases, which can help them create more targeted and effective campaigns.

However, consumers often fail to notice offers available at checkout, resulting in a significant loss of potential sales, estimated at $42.4 billion in grocery, retail, and restaurant spending. Banks are particularly interested in leveraging checkout-integrated promotions, as 58% of surveyed grocery, retail, and restaurant merchants have implemented these promotions in the past year.

Nevertheless, limitations in data access and other considerations, such as liability and costs, may hinder their ability to personalize promotions effectively. Despite this, commerce media offers banks an alternative revenue stream that is less dependent on interchange fees, which have been a point of contention in recent years.