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Predicted spend vs. actual spend
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Experian TAPSSM (Total Annual Plastic Spend)
What is Experian TAPS?
Experian TAPSSM is the first industry-unique algorithm that accurately estimates a consumer’s spend on all general purpose credit and charge cards over the last 12 months.
How Can Consumer Spending Data Help My Business?
By providing clients with just this single piece of information, Experian TAPSSM will enable lenders to dramatically enhance marketing and account management strategies by helping them:
- Target high spending consumers with your best offer or customized rewards program
- Assign the credit limit your customers need and want
- Assign the correct APR in underwriting to maximize wallet share and interchange revenue
- Retain profitable accounts and identify customers where there is additional wallet share to capture
- Combine with income to identify potential debit users
Learn more about Experian TAPSSM by selecting a topic below.
- TAPS is the first ever commercially available spend algorithm built from credit data
- Experian TAPSSM uses longitudinal credit data to estimate the last 12 months of consumer spend on credit and charge cards
- It calculates consumer spending data, separately, on each trade line, then aggregates those trade lines to provide a snapshot of an individual's annual spend
- Validated on the accounts of multiple card issuers and networks
- The TAPS model discriminates consumer spend, accurately and independent of balances with R2 of 0.75-0.87
- TAPS is complementary to Vantage Score, credit line and utilization and thus can rank within sub-segments.
- The consumer spending data provided by Experian TAPSSM is designed to give the client the ability to...
- Target higher spending customers or prospects
- Prioritize marketing investment
- Assign credit lines based on actual spending need
- Gain a sharper understanding of what drives consumer spending
- Retain customers that contribute to your bottom line
Clearly, all customers don’t have equal value. Given the new economic environment, the ability to separate and differentiate the highest spending consumers allows you to focus capital where it counts.
You can deliver better service, provide superior rewards, and even offer significantly higher credit lines - when you know the total spend they generate, not just on your accounts but on "off us" accounts as well.
Know your customers and prospects
Experian can provide an overview of your current situation, clearly illustrating the consumer spending data and spend behavior of your prospect pool or portfolio. Understand how your existing line assignment, product offerings, and APRs influence your customers' card preferences.
Append to prospect database
Refine your prescreen universe to target those prospects that meet your spend criteria while developing offers that improve response.
Include in portfolio account reviews
Identify and invest in those segments that have spend to shift. Fine tune retention and cross sell strategies to negotiate for the spend you know is there.
Integrate into credit decision
Are you assigning high lines to customers that never spend enough to use them? Are you eliminating your card from true consideration by establishing a line that doesn’t come close to meeting the real need? TAPS provides the ability to right size a credit line generating profit not just mitigate risk.
- Capture the spend you didn't know you were missing
Are you capturing the share of spend that you want?
- 65% of spend opportunity comes from only 20% of all the accounts in the US.
- The lowest 40% of spenders have limited spend to tap
Are you building your portfolio with a limited view to your customers' real potential? The best card issuers capture a significant share of total spend. Are you wasting capital on customers that while low risk, do not spend? How do you get your fair share? Experian TAPSSM shows you what you're missing and provides important insights that allow you to maximize your investment dollars.
Experian TAPSSM uses balance data to estimate the annual spend on every credit card. It then aggregates trade lines to provide a clear snapshot of an individual's annual spend across all their general purpose credit cards.
Experian TAPSSM is strongly correlated with income, deposit balances and net worth.
- FCRA compliant
- Can be used for adverse action
- Validated on the accounts of multiple card issuers and network trade lines
- Available via batch processes and on line credit reports (online coming soon!)
- It’s calculated at the individual level
- Calculate a lender’s wallet share for each consumer through the use of Experian subcodes
- Returns 5 data elements: total spend, pay rate, client spend, other spend, wallet share
- It’s not aggregated by zip code (geo-modeled) or inferred –it uses actual individual data
Features: Wallet share
Experian TAPSSM can also calculate a lender’s wallet share for each consumer through the use of Experian subcodes
Note: The algorithm is not “predicting spend” –it interprets the last 12 months of longitudinal credit history and calculates a proxy for historical spend. Therefore, it is not a model per se, but more like a complicated attribute.
Features: Returns 5 data elements
Experian TAPSSM returns 5 fields
Total Spend Pay Rate Client Spend Other Spend Wallet Share
- Total Spend: Sum of total spend over the last 12 months for an individual
- Pay Rate: The proportion of a consumer’s average monthly balance that is spend (spend/ avg bal / 12)
- Client Spend: Sum of total spend over the last 12 months for an individual on the clients trade lines only. a.k.a "On Us" Spend
- Other Spend: Total Spend –Client Spend, a.k.a "Off Us" Spend
- Wallet Share: Client Spend / Total Spend
- Who can use the consumer spending data in Experian TAPSSM?
- Card Issuers
- Prescreen targeting
- Acquisition and Portfolio - target high spend prospects and increase "wallet share"
- Optimize Line Assignment
- Retain and cross-sell the right customers
Banking / DDA / Retail
- Target high profit prospects
- Separate NSFOD prospects from High Profit prospects
- Targeting better HELOC prospects by separating those that use credit lines as safety nets vs. home improvement
- Correlated to net worth
- Correlated to deposits
- Separate customers that predominantly use debit vs. Credit
- Prescreen Targeting
- Identifying those with discretionary income
- Rank order ability to pay
- Billing –rank order ‘reminder’ calls
- Rank order ability to pay
- Permissible uses span across Customer Lifecycle
- Rank order prospects by spend and optimize targeting
- Optimize line assignment by giving larger lines to customers that will use it
- Optimize risk based pricing assignment by incenting larger spenders with lower rates
- Optimize fee waiver and retention programs by identifying broader interchange income and wallet share opportunities
- Augment Line programs similar to Underwriting
- Augment Line programs similar to Underwriting
Experian TAPS can be used for the basis of adverse action.
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