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Why Transaction Data Is Becoming a Must-Have for Local Governments

Cities and counties have always relied on census tables, tax receipts, and permitting data to understand their economies. That said, there are much more powerful and predictive sources available.

Aggregated credit and debit card data gives municipalities a real-time view of their local economy, showing where residents live, where and how they spend, and creating a more precise foundation for planning and decision-making.

Here are 6 ways to make use of credit and debit card data as a municipality or local government:

1. Economic Development and Business Attraction

Economic development teams are using transaction data to identify what is missing in their communities and to build stronger cases for business recruitment.

  • Retail Gap Analysis: Measure where local spending is leaving the area. If residents spend $15 million on sporting goods each year but only $6 million locally, that $9 million gap is an opportunity to recruit a retailer or developer.
  • Location Suitability: Present prospective businesses with data on local demand, spending levels, and neighborhood fit to strengthen site selection pitches.
  • Business Retention: Track which local businesses are growing or declining to identify those that may benefit from targeted support such as grants or marketing programs.
  • Small Business Benchmarking: Share anonymized category insights with merchants, such as “citywide restaurant spending is up five percent year over year,” helping them plan operations and inventory.

2. Fiscal Planning and Tax Revenue Forecasting

Finance departments are using transaction data to improve the accuracy and timeliness of revenue forecasting.

  • Sales Tax Projection: Real-time spending data allows for early estimates of sales tax revenue without waiting for state reporting cycles.
  • Seasonal Modeling: Spending trends can be analyzed by category to reflect seasonal peaks, such as back-to-school periods, holidays, or tourism surges.
  • Tax Leakage Detection: Comparing total spending estimates to reported taxable sales can highlight inconsistencies and help detect potential underreporting.

3. Urban Planning and Land Use

Urban planners are using transaction data to align zoning and infrastructure decisions with actual consumer behavior.

  • Retail Cluster Optimization: Identify neighborhoods where residents spend heavily in certain categories but shop elsewhere. These areas can become targets for zoning updates or retail incentives.
  • Transit-Oriented Development: Evaluate retail corridors near transit lines to understand which are performing well and which might benefit from additional investment.
  • Vacancy Analysis: Monitor areas where spending declines and turnover rises. Early detection helps cities focus revitalization funding before commercial areas begin to deteriorate.

4. Tourism and the Visitor Economy

Cities and counties that depend on tourism are using spending data to measure visitor impact with greater precision.

  • Visitor Spending: Analyzing cardholder ZIP codes helps separate local and nonlocal spending to reveal how much visitors contribute to restaurants, retail, and lodging.
  • Event Impact: Tracking spending during festivals, conventions, or sporting events provides a clear measure of their economic contribution.
  • Marketing ROI: Tourism departments can see whether spending from targeted regions increases after marketing campaigns, helping evaluate return on investment.

5. Community and Equity Insights

Spending data is also helping local governments identify inequities in economic activity across neighborhoods.

A neighborhood vitality index based on transaction trends can show which communities are recovering quickly and which are falling behind. Those insights allow for targeted investments such as small business support, façade programs, or community lending.

The same data can also reveal retail deserts, where residents rely heavily on distant shopping areas. Addressing those gaps supports both equity and resilience by channeling development into underserved neighborhoods.

6. Crisis Monitoring and Economic Resilience

When crises occur, such as pandemics or natural disasters, transaction data provides a near-instant view of local economic conditions.

It can highlight which sectors and ZIP codes saw the steepest drops in spending and help local governments direct relief efforts where they are needed most. During recovery, the same data can track how quickly different parts of the local economy return to normal, creating a feedback loop for better policymaking.

A Smarter Foundation for Local Decision-Making

Transaction data strengthens traditional indicators by filling in the blind spots that tax data, permits, and surveys leave behind. It gives local governments a live pulse of their economies instead of a delayed snapshot.

When consumer behavior changes from week to week, waiting months for official reports forces cities to react after the fact. With transaction-level insight, local officials can see when retail corridors start to soften, track how much spending is moving online, or measure whether a new development is lifting nearby businesses.

For city and county leaders focused on economic stability and smart growth, this level of visibility has become essential for how modern communities are managed.