As we bring more data into all aspects of our shopping lives, consumers may suddenly face the same conundrum in restaurants or stores. As data collection and predictions improve, stores are better able to anticipate the value of a customer and reward them accordingly. This leads me to wonder two things, how does this change customer service? And will it drive consumers to greater loyalty by making the cost of switching providers higher?

I spoke yesterday with a company called Swipely that provides a payment system to small businesses. The company is now managing more than $500 million in annual sales — a number that has grown 100 percent the last three months in part because its customers get a side order of data with the payment processing.

One of the metrics Swipely offers is an estimated customer lifetime value (based on demographic data and the amount the customer has already spent). Seeing this gave me a bit of a chill, in part because it took the concept of customer service and turned it from a basic expectation to a cold calculation based on your potential worth as a customer.

That’s not to say that clerks or managers at restaurants will suddenly turn into jerks for customers who don’t shop there often, or will play it cool with new customers until the vendor determines how much that individual might be worth to the business. Heck, in many ways that already happens: shopkeepers often assess your likely purchasing habits by your demeanor, dress and other physical attributes.

But putting a number on your worth as a customer and cloaking it as data turns it from a hunch into something that feels rational and scientific, even if the algorithm behind that metric is unproven. And believing they are behaving rationally can drive businesses to make really inhumane decisions about humans. In an ideal world this data would be used to reward loyal shoppers (perhaps in the same way the Ritz Carlton rewards its loyal customers already), but what happens when this experience trickles down from a high-end hotel to a local toy store?

It’s one thing to eat every week at a nearby Mexican restaurant and have the manager know your name and set aside a table for you. It’s another when based on a few visits to an establishment, you’re lumped into a certain class of customer based on predicted spend than gives you substantial benefits. Can vendors offer enough perks to those “whales” that they might ignore a lapse in service to keep their free queso coming?

Does this added layer of data start to boost customer retention to the point where it’s harder for another restaurant to win business? This may seem almost silly, but in the cell phone industry things like early termination fees, contracts and (formerly) the inability to port a telephone number created such high switching costs that there are concerns about those practices making the market less competitive.

I would like to think that better data in loyalty programs wouldn’t distort the market for local goods and services, but I am curious if it will. Human nature is such that a free bowl of queso and someone knowing your name can overcome mediocre enchiladas and the occasional service lapse.

And if you’re opening a taqueria down the street getting those customers in the door might prove to be more expensive and have little to do with your fabulous tomatillo sauce.

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The company for the last six months has competed against big payment processors and merchants acquirers like Bank of America, First Data and Chase Paymentech. But instead of trying to compete on lower fees, it supplies data analytics, marketing and loyalty services that are built off credit card swipe transactions. This gives merchants valuable tools to break down sales trends, better identify their best customers and reach out to loyal or lapsed customers through email marketing and retention tools.

In the six months since Swipely moved to this model of combining payments, analytics and marketing, it has processed $250 million in payment volume. That’s a drop in the bucket compared to big competitors. But the solid growth shows that Swipely may be on to a business model that works. And now the company is expanding its offering for its merchants to help them get even more insights and forge a better relationship with their customers.

With Swipely Winter ’13 update, Swipely is now able to provide spending data on individual users, so a merchant can see what its top users are doing in real-time and cater to their needs. Previously, Swipely offered trend and aggregate spending data, but now it can provide a CRM tool complete with customer profiles for merchants.

Swipely is also offering next-day settlement through a partnership with American Express. Merchants can use Swipely’s newly tablet-optimized dashboard to receive more detailed sales data, such as hourly sales trends, multiple location information and daily sales reports that include social media interactions. And Swipely is opening up its service to 20 more point of sale systems.

Davis said Swipely is now where it needs to be, competing in the massive $70 billion payments market. He said the landscape for pure loyalty startups is bleak, something Google also seemed to acknowledge with the recent closure of Punchd. By bundling in payments, Swipely can displace an existing cost for merchants and replace it with free marketing and analytics tools for businesses. He said most businesses are not getting any real data insights from their payment processor.

“We give merchants the ability to understand their sales data. You can now understand your customers in ways you couldn’t before,” said Swipely. “We’re bringing analytics to Main Street.”

What makes Swipely attractive is that the company matches whatever fees that a previous payment processor offered so there’s no added cost to try it out. And it works with most existing hardware so it doesn’t require any new point of sale upgrades.

Davis said the company only has a few hundred customers, who are doing an average of $1 million in annual card transactions. But he expects his customer base to skyrocket in 2013 as merchants learn about the service and he’s quadrupling his sales team to handle the demand.

I think Swipely made a smart move in finding the right fit for its card swiping technology. Many merchants are still struggling to better understand their customers and could use the tools Swipely offers. Some mobile payment services like Square offer simple analytics, but they don’t always appeal to bigger merchants who have sunk a lot of money into existing hardware.

Swipely, which has raised $8.5 million to date, also works with some mobile point-of-sale applications like Lavu POS. The product shows that the credit card is still valuable to merchants and consumers even with the rise of mobile payments. Despite a bunch of iterations, Swipely may have finally found an approach that sticks.

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Swipely comes from Tellme co-founder Angus Davis, who is reapplying some of the speech recognition principles he capitalized on at his last company to make sense of the garbled mess of digital shopping data. The Swipely team has figured out how to intake transaction records — whether through direct connection to a credit card account or emailed receipts — and match them to product catalogs and restaurant menus. The result is an easy way to tell other people what you bought. Today Swipely might just start a conversation in a comment thread, but later it might connect you more closely with the retailer to take advantage of deals, find you nearby stores that your friends or people like you recommend, or inspire savvy shopping through competition with friends.

Providence, R.I.-based Swipely will naturally draw comparison with Blippy, the automated purchase-sharing service that has already launched (and already had one major user privacy slip-up). These sites also harken back to Facebook’s ill-fated Beacon activity-sharing project of a few years ago.

But Swipely is taking a more conservative approach. Users must approve each purchase they share from the online interface (though they can opt-in to automated sharing). The amount they spend is never shared. Users don’t give Swipely the logins to their retailer accounts (though they can give the site their Gmail credentials and indicate which stores’ emailed receipts to pull). And there are lots of assurances of “bank-grade encryption” for all personal information.

“We want to let people nudge themselves into auto-sharing,” said Davis. “We could turn off a lot of mainstream people if the lever starts out at that end of the spectrum.”

Swipely has raised $7.5 million in Series A funding led by Index Ventures and including Greylock Ventures and First Round Capital with Chris Sacca, Keith Rabois, Ron Conway, Anton Commissaris (from Mint.com), Lee Hower, Charles Moldow and Emil Michael. The company previously raised $1 million from Davis, First Round and Conway.

Davis’ plans for Swipely’s future include mobile apps (along with filtering purchases by location), sharing on social networks (that will come after the site launches to the public, which is supposed to be this summer), improved transaction analysis (the match rate is currently 50 percent, but the system should learn as people start using it) and retailer participation.

Ultimately, the site should save users money while also inspiring demand for new purchases (a push-pull relationship, to be sure!). For instance, Davis said, the site could introduce a game with a leaderboard for who found the cheapest gas each week. But that’s the thing — you can’t exactly have a gas price leaderboard without sharing transaction amounts. For the service to become more useful, I’d bet it will become less private and less conservative.

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