MasterCard To Launch Online Marketplace

The New York Times reports that MasterCard will be launching a "predictive online marketing business" called MasterCard Marketplace through a new partnership with Next Jump, a New York company that monitors customer behavior from thousands of retailers and uses the data it gathers to help merchants tailor their product offerings.

MasterCard will introduce its Web shopping mall on Monday, saying it will be able to pinpoint with considerable accuracy what its cardholders are likely to purchase.

MasterCard’s competitors are also trying to expand their presence in online commerce. For instance, American Express has a site called “Daily Wish” that offers discounts, and Visa is in the process of introducing RightCliq, intended to help consumers comparison-shop online.

Next Jump’s putative advantage is that it draws on buying histories across thousands of retailers, giving it a huge sample size of consumers to analyze.

Charlie Kim, the company’s founder, says Next Jump converts one in every 11 browsers into buyers, a rate that far exceeds the industry norm. Running employee discount and reward programs for many big companies for more than a decade, it has gathered data to help refine its algorithms for predicting what people are likely to buy.

On the new MasterCard site, shoppers will be asked to select a handful of merchants they favor. From there, Next Jump will monitor how they use the site and adjust offers accordingly, said Joshua Peirez, MasterCard’s head of innovation platforms.

“Next Jump measures everything you do on the site,” Mr. Peirez said.

Next Jump’s technology is already available on Yahoo’s shopping site, as well as on the sites of many corporate perk programs that offer merchandise discounts to employees. In 2008, MasterCard began offering discounts to debit card holders on a Web site called MasterCard Savings that employed Next Jump’s algorithms; officials described it as a pilot project.

While the technology developed by Next Jump worries some privacy advocates, MasterCard said it was working to assure customers’ privacy. For one thing, customers are not automatically enrolled in the marketplace site but must sign up on their own. Retailers will not be provided names of specific customers but rather a batch of customers who share certain characteristics, like income level or having young children.