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Does anybody know why transactions don't include metadata about the products bought?
It's 2024 if I remember correctly and budgeting is a fairly common practice. Companies are obsessed with data. Yet when I got to the store and buy a videogame, dap drywall joint compount, and 3 avocados the transactions is just the store and the amount. It'd be nice if I could track what I've been buying, categories them into entertainment, home improvement, and groceries respectively.
I'm guessing this information actually is tracked but is only used for marketing purposes. But I'm curious, does anyone have more information on why transactions can't at least optionally support extra metadata about what was actually bought?
As a bookkeeper and someone who has set up records automation for more than a few businesses, here's my understanding of why it doesn't happen: conflicting incentives between the different companies involved in the process.
And when I'm at a computer to write up a greater explanation, I'll edit this to explain further.EDIT:
@rocket_man Ok, here's the (overly) detailed version.
Flow of money/info: You buy a mixed bag of things at a general retailer using your credit/debit card. That retailer uses a merchant services company to manage all of the various electronic payment options, and that merchant services company takes the information that the retailer offers them regarding the transaction, and then goes to your credit card company to request payment. That information is recorded by the credit card company or bank, and it sends the funds to the merchant service company who takes their cut and sends it to the retailer. So even in this simplest form of payment has three companies. The retailer, the financial institution, and the merchant services company.
Data storage/transmission cost. As it stands, there's no standard format for financial data. You can expect the date, retailer, and transaction total, but how those are conveyed will differ. Beyond that, none of the companies benefit from making the transaction data take up more space, for transmission or storage. The retailer would have to add internal tracking per item type, and then surface that in a format that the merchant services company understands. The merchant services company would have to both store and send more data. The bank/credit card company would have to be able to store and categorize all of that data in-house. Many of them have some general categorization based on vendor, since they already get that info, but unless further competition among financial institutions pushes greater data analysis (which is really unlikely, given the additional costs for everyone in the chain) it's unlikely to develop as part of a bank's offering.
So no one in the chain actually benefits at this time, except you.
This is a fantastic write up. I work for a winery and often deal with payment processor/revenue/refund issues. Most people don’t understand how much work it already is to get these systems integrated as much as they are.
You have a good breakdown of the company/payment processor/bank request line, but just for some more context, there can be even more systems that a single order needs to be sent to. For wine, the order first goes to ShipCompliant, which is a service that verifies that every order is legal to send, and then it has to go to our warehouse’s system (the warehouse is a separate company). All of this needs to go into our Enterprise Resource Planning (ERP) system. Just getting all of this working right takes significant IT time. We transitioned to a new ERP in June 2023, and until about a month ago, refunds didn’t correctly get communicated back to the ERP, so the finance team had to manually enter them. If we wanted to send order info to our payment processors (we have 2, a separate one for AMEX), we would need a much bigger IT team to do it, and that takes money.
I think there is often an impression that “the data exists somewhere, why don’t we just use it”, but if it isn’t in the right system, or the right format, it is useless. It takes significant engineering to get data to the right place and format.
Very good info, thanks for the write-up. I suppose it is just pretty complex to get multiple systems working together. Similar problem to tracing coffee/tea back to ti's origin. But I do get the impression financial system has a lot of room for improvement/innovation. I suppose it just takes time.
Time, an incentive, and vertical integration. Bill.com recently acquired a credit card company specifically because they can then get additional insight into the spending patterns of employees with company credit cards, and it gave them a huge leg up over other expense management software. You really won't get what you're asking for without a company becoming dominant enough that other companies start following their data standards.
Sounds like what you're asking for would provide value to the consumer, and not to the retailer.
Accordingly, you have to do it yourself.
I would absolutely hate if the CC processors tried to collect additional data about. There is already too much of everyone's data floating around our there. As soon as they started doing this they could sell it to all sorts of other companies. I imagine Amazon would love to get their hands on all of the sales data from other companies. It would be quite valuable to them, but I'd never see a penny.
I work in a related field, processing credit card transactions for a grocery store. By the time a transaction gets to where I deal with it, there's no information about the cart, basically just a single number for the total that gets sent out to the payment processors and some info about the card (but not the card number itself, we never see it ourselves).
For FSA/HSA, EBT/WIC, and probably others there is information about the cart sent so we can find out which items are covered by those programs, but I'm honestly not very familiar with that since I mostly work with typical credit cards. Also, I absolutely never want to see your cart info because that's getting into PII and I never want to have PII stored. Elsewhere in the company that data exists and is used for marketing but I never want to see it when handling payments.
If you want to track spending at individual item levels, keep your receipt or take a picture of it. With a picture you can use your phone's OCR to extract the info and I'm sure there are tons of apps that can extract it all for you. And a receipt can have all the items broken out without the backend servers storing that info tied to you. And if you don't use a loyalty number all that it can tie to is your credit card (and your phones wifi and Bluetooth MAC addresses since they can track you throughout the store).
If you care about not being tracked, use Google/Apple Pay so the card number is different and periodically changes, don't use a loyalty card, use a phone that randomizes your MAC address(es) and/or turn those radios off, don't give apps location access unless they need it (and close the apps when you're done) and also use ad blockers (phone-wide if you can).
I guess it depends on where you live, but this is absolutely possible. In my country there is a standard for it which is supported by all banks, so all stores that use newer PoS systems do have this metadata attached to them - eg. I can open my bank app, click on a transaction and see a list of products I bought with prices.
Here's one transaction, for example. You can see the "shopping list" section, which contains the two products I bought in that purchase.
So yeah, it's very much something that can be done, the issue is that the banking system in most countries is just a mess without any official standards, so implementing stuff like that would be very hard.
The Amazon Store Prime card is the only card that I know of that does it and despite synchronity being a shit website and the experience not being the best, that feature is so good, it’s worth the bad.