Would CRM Work If Customers Had An On/Off Switch?

Written by Evan Schuman
November 13th, 2008

Equifax on Thursday (Nov. 13) announced an E-Commerce CRM and payment card that consumers can activate and deactivate based on how they feel about the site they are visiting.

The credit database giant argued that such a card could potentially reduce "the need for companies to retain customers’ personal identification information, which could also result in the reduction of risks posed by data breaches." Although that theoretically could be the case, the only way such a card—dubbed the Equifax online identity card—will be successful is if it’s adopted by a large number of retailers. And each of those retailers would have to be willing to surrender one of their most precious pieces of data: customer history.

The marketing battle for such a card could move to consumers—which appears to be Equifax’s initial approach—on the rationale that if enough consumers have the cards, retailers would have little choice but to accept the cards and the corresponding loss of data control. That leaves Equifax in an uncomfortable chicken-and-egg position, where consumers would be unlikely to embrace the card until it’s accepted by many—if not most—of their favorite retailers.

The consumer argument focuses on the payment aspect of the card, promising shoppers "greater security and control and without having to fill in forms or remember multiple passwords," according to an Equifax statement. "People will be able to create and collect (cards) that contain personal data such as their profile, purchase preferences, payment, or verified identity information" and the cards will allow consumers to "release their personal data to accepting Web sites they trust with a single click."

But there are potential advantages for retail IT if such an approach works. Because the CRM data would be collected from multiple merchants that the consumer used, it potentially could be a much more comprehensive and extensive snapshot of that customer’s buying history. A typical retailer today would, at best, have a complete list of the purchases from that customer only at that retailer’s own stores. (A current mobile payment trial in Japan specifically added programming to prevent any one retailer from viewing CRM from another retailer.)

Just like the online manager who must offer discounts and other incentives to get people to use their loyalty cards, the approach Equifax is pushing would force online sites to constantly give consumers a reason to use their loyalty cards.

This approach raises many questions. One implication is that consumers could allow a retailer to have data access once and then chose whether to offer such access to that retailer again based on how responsibly it handled that data. That could be a powerful method to encourage retailers to be more discreet and courteous data users.

But what would prevent a retailer that is given initial access from capturing it all and then saving it locally, tracking the user with either a cookie or a password, thereby bypassing both the convenience and the data control originally promised?


Comments are closed.


StorefrontBacktalk delivers the latest retail technology news & analysis. Join more than 60,000 retail IT leaders who subscribe to our free weekly email. Sign up today!

Most Recent Comments

Why Did Gonzales Hackers Like European Cards So Much Better?

I am still unclear about the core point here-- why higher value of European cards. Supply and demand, yes, makes sense. But the fact that the cards were chip and pin (EMV) should make them less valuable because that demonstrably reduces the ability to use them fraudulently. Did the author mean that the chip and pin cards could be used in a country where EMV is not implemented--the US--and this mis-match make it easier to us them since the issuing banks may not have as robust anti-fraud controls as non-EMV banks because they assumed EMV would do the fraud prevention for them Read more...
Two possible reasons that I can think of and have seen in the past - 1) Cards issued by European banks when used online cross border don't usually support AVS checks. So, when a European card is used with a billing address that's in the US, an ecom merchant wouldn't necessarily know that the shipping zip code doesn't match the billing code. 2) Also, in offline chip countries the card determines whether or not a transaction is approved, not the issuer. In my experience, European issuers haven't developed the same checks on authorization requests as US issuers. So, these cards might be more valuable because they are more likely to get approved. Read more...
A smart card slot in terminals doesn't mean there is a reader or that the reader is activated. Then, activated reader or not, the U.S. processors don't have apps certified or ready to load into those terminals to accept and process smart card transactions just yet. Don't get your card(t) before the terminal (horse). Read more...
The marketplace does speak. More fraud capacity translates to higher value for the stolen data. Because nearly 100% of all US transactions are authorized online in real time, we have less fraud regardless of whether the card is Magstripe only or chip and PIn. Hence, $10 prices for US cards vs $25 for the European counterparts. Read more...
@David True. The European cards have both an EMV chip AND a mag stripe. Europeans may generally use the chip for their transactions, but the insecure stripe remains vulnerable to skimming, whether it be from a false front on an ATM or a dishonest waiter with a handheld skimmer. If their stripe is skimmed, the track data can still be cloned and used fraudulently in the United States. If European banks only detect fraud from 9-5 GMT, that might explain why American criminals prefer them over American bank issued cards, who have fraud detection in place 24x7. Read more...

Our apologies. Due to legal and security copyright issues, we can't facilitate the printing of Premium Content. If you absolutely need a hard copy, please contact customer service.