One of the fundamental foundations of this model is the ability to identify geolocated movements of banking transactions in real time and accurately.
The importance of geolocation of bank movements for international merchants
The provision of geolocation banking services represents one of the fundamental pillars of online commerce.
Over the last few years, and especially during the pandemic, the management of online commercial transactions has become the fastest growing sector. It has developed from a technological, banking and financial point of view.
In terms of geolocation services, this is even more significant. According to the report Location Based Services Market Statistics: 2030, conducted by Allied Market Research in mid-2021, this is a market whose value in 2020 was around $36 billion.
This figure reached $45 trillion in 2021. Thus, a compound annual growth rate of 24.3% is estimated; by 2030 it would represent about $320 trillion.
This pronounced growth is due to the increased dependence of large international merchants and merchants on solutions from the fintech sector. With these innovative solutions, they can improve service performance and tap into emerging markets.
These markets have become accessible thanks to geolocation APIs (application programming interfaces) for recording and processing banking movements and commercial transactions.
Current legislation and regulation of geolocation of bank movements
At the European level, the European Commission’s revised Payment Services Directive (PSD2) is one of the most far-reaching international regulatory initiatives. It sets out the conditions for the legitimate operation of payment services and the intervention of data providers.
More specifically, the General Data Protection Regulation (GDPR) determines the legitimate conditions for the use of data by companies, financial institutions and other organizations. The GDPR indicates good practices for the collection, storage and transmission of user data.
At the local level, reference can be made to article 64.b of Royal Decree 424/2005, of April 15, 2005. This article establishes the legitimate conditions for the protection of user data based on the use of location data in commercial or financial activities.
How to apply geolocation of bank movements
The processes of geolocation of banking transactions are complex. However, today’s APIs incorporate all the necessary technology to provide payment and banking management services from different devices.
Geolocation uses the following components together to provide reliable data on banking transactions:
First of all, it is necessary that the transactions are carried out using devices that have one of the geographic positioning technologies. The most common are:
Access to an Internet network
For the geolocation of bank movements to be carried out efficiently and in real time, it is necessary for the devices to have access to a network. This network allows them to maintain uninterrupted data transmission between the user and the service provider: fiber, 3G, 4G or 5G internet.
Although it is nothing new to mention that nowadays most of our devices have Internet access and geolocation.
In this case, we are talking about geolocation service operators. Providers manage the software and provide the necessary components according to the customer’s requirements. In this way, data models are created and applied to APIs.
Finally, within geolocation, suppliers that provide their own digital mapping services are essential. In this way, they make the information of businesses, companies, public bodies and authorities accessible to be used by APIs –Google Maps is the most important of them-.
What benefits does geolocation bring to both banks and customers?
The benefits of geolocation of bank movements are obvious, especially for international merchants.
Thanks to this technology, it is possible to improve the performance of geolocated movements based on market segmentation. Here are some of its most important benefits:
Geolocation makes it possible to establish a geographic area of the person’s usual transactions. Thus, it traces their movements to verify transactions and ratify bank movements made in physical stores.
Improving the performance of banking services
Reliable geographic data on consumption habits allows a more accurate socio-economic profile of the user to be established. As a result, banks can adapt to the particular needs of each user. Through this categorization and classification, they are grouped under different consumption categories and the offer of services or the sending of communications, among others, is personalized.
Harness the power of transactional data and apply COCO’s artificial intelligence to analyze and categorize banking data.
By having data on customers’ habitual consumption, online banking applications can point users to commercial benefits that are nearby or that may be of interest to them.
International merchants and companies can then be provided with areas where the incidence of customers is highest. In this way, commercial communications are much more precise, instantaneous and effective.
Right person, right place and right time.
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Consumer trends and habits
Thanks to geolocation, companies and businesses can expose themselves to a wider spectrum of the market. This is a novel way to offer services based on seasonal consumption habits, consumer expectations and emerging trends in previously ignored areas.
Discover how to build customer loyalty here.
For international merchants, geolocation banking services allow them to build a profile of users that improves business performance. Precisely for this reason, geolocation of bank movements are a fundamental axis for the development of the digital banking sector.
Let’s take it for granted that we are located on a map and start taking advantage of this useful transactional data.