1. A system comprising: a non-transitory memory; and one or more hardware processors coupled to the non-transitory memory and configured to read instructions from the non-transitory memory to cause the system to perform operations comprising: receiving first merchant information associated with a first merchant; receiving second merchant information associated with a second merchant; monitoring, using a payment application running on user devices associated with a plurality of customers, first customer transactions processed through the first merchant and second customer transactions processed through the second merchant; receiving sensor information from the user devices associated with the plurality of customers; assigning the first merchant and the second merchant to a group associated with a first type of merchants using a similarity score determined for the first merchant and the second merchant based on the first and second merchant information and the first and second customer transactions; in response to the assigning, determining for the first merchant, first distinguishing characteristics of the first merchant distinguished from characteristics of the second merchant and for the second merchant, second distinguishing characteristics of the second merchant distinguished from characteristics of the first merchant based in part on the received sensor information; detecting a first condition based on first sensor data obtained from a first set of sensors associated with a first customer; associating the first customer with the first type of merchants based on the detected first condition; in response to the associating, detecting a second condition based on second sensor data obtained from a second set of sensors associated with the first customer; selecting the first merchant from the group of merchants for the first user based on the detected second condition and the first distinguishing characteristics; and transmitting a recommendation for using the first merchant to a first user device associated with the first customer.