This guide is designed to answer common questions about Enigma’s merchant transactions data and give a framework for understanding where Enigma’s merchant transactions attributes are strong and where they are not, across both attributes and business segments.

For an overview of merchant transactions attributes, please first read our merchant transactions signals page.

To better understand this guide, readers should understand that the Enigma Business Location refers to transactions attributable to a specific address/location for a business, while an Enigma Business refers to holistic brand-level revenues. A Business incorporates both constituent Location transactions and transactions unresolvable to a location; all Enigma Locations belong to a Business. For an overview of the difference between business vs. business location revenues, please read our data structure page.

Common Questions

How does Enigma maintain its accuracy?

Enigma uses a third party data set from a processor to validate revenue attributed to businesses. By comparing transactions from card issuers against a card processor, Enigma is able to continuously maintain its merchant transaction data accuracy.

What are some reasons for underestimating revenue?

No corporate cards: Enigma does not collect transactions from any corporate cards and does not adjust for them. As a result, Enigma severely under-reports business-to-business revenue.

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Recommendation - avoid using merchant transactions revenue for B2B companies; OK to use growth and transaction size

We recommend customers do not use Card Revenues for B2B businesses. However, customers may continue to use average transaction size and growth trends for businesses with a high proportion of B2B transactions.

Under-resolution or under-counting due to uncertain or mixed information about the merchant: Enigma only attributes a transaction description to a merchant if there is >95% precision that the transaction description is tagged correctly.

Enigma opts to under-reports revenue systematically so that Enigma revenue can always be used conservatively. This is by design, as credit risk customers have requested conservative estimates in order to be confident in underwriting loans to businesses.

The below is an example for how transactions with varying levels of information are tagged or not tagged:

The Industry Coverage list at the bottom of the linked page shows where Enigma revenue is generally strong and has high coverage. Note that this general list may interact with the list above to produce some segments for which Enigma card data is less accurate - for example:

• Fine dining chains (due to high corporate card proportion and large chains)
• Ecommerce with a high proportion of channel sales (due to sales under very different transaction descriptions

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Recommendation - using merchant transactions revenue as a floor:

Because Enigma is conservative in its estimate, many choose to use Enigma’s revenue as a floor for a business or business location’s card revenues. Furthermore, other attributes like growth and average transaction size generally hold true even if not every transaction is tagged.

What are some reasons for over-estimating revenue?

While revenue under-estimation is by design, revenue over-estimation or over-resolution are known issues that Enigma tries to tackle on a case-by-case basis. Unlike revenue under-estimates, which affects many businesses by a small amount, over-estimates affect a few businesses (~1-3% of the total asset) to a larger degree.

Some common reasons for over-estimated revenue are below:

Multi-tenancy and platforms: We believe ~1-3% of Businesses and Locations contain over-resolution problems because of several different locations that share a very common name and address. This is most common in multi-tenant buildings that also contain large chains of businesses, as well as certain platform channels. In the example below, it is likely that all transactions are tagged to a parent mall vs. the constituent stores:

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Recommendation: Use outlier thresholds for different revenue segments

Some businesses will return much larger revenue than expected. Depending on your portfolio, you may set thresholds for revenue outlier thresholds that discard or ignore returned revenue if it exceeds those thresholds. For reference, the 5th/95th percentile for card revenue for every 4-digit NAICS code is here.

Incorrect website inputs: Occasionally, customers will include in their input file a website input that does not actually correspond to the business, or a larger platform (e.g. facebook.com). Enigma has removed the ability to match to the most popular platforms or services, but some may still remain.

Enigma WILL successfully match on a specific page name within a larger platform as illustrated in the example below.

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Recommendation - ensure your website inputs are correct

Ensure your website inputs are correct. We also recommend having a Enigma Solutions Engineer enrich your file to catch mistakes and check for any errors that you may not catch by contacting [email protected].

Holistic vs single processor revenue: If you have ground truth card data on your side, i.e. you are a card processor, you may see that Enigma’s revenue may be greater than what you see on your side. Because Enigma’s data comes from the card swipe, it sees holistic revenue across many different processors, whereas you may only see revenue from your own processing.

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Recommendation - use Enigma's merchant transactions revenue as a floor

If you are a card processor, by design, some businesses should see greater Enigma revenue than what you may see. You may use Enigma as a floor estimate. For instance, if you are using Enigma revenue to size lines of credit or merchant cash advances, if Enigma is greater than what you see, you may rely on Enigma’s card revenue.