When you use your credit card, you may not realize that you are also sharing information about your spending habits with the credit card company. Credit card companies collect data from transactions and use it to gain insights into consumer behavior and preferences. This data is used for various purposes, including tailoring marketing, advertising to individual customers, and sharing data with third parties. However, the collection and use of this data can pose potential risks to your privacy. In this blog post, we will explore how credit card companies collect and use data, and what you can do to protect your privacy.
How credit card companies collect data
According to Geoffrey Fowler, there are six distinct types of businesses that share data about your purchase every time you use a bank or credit card. From these six entities, other companies then get hold of your data.
- The bank
Did you know your bank can share your financial data? The 1999 Gramm Leach Bliley act allows banks to share personally identifiable data with companies. They just must put up a privacy notice letting customers know.
- The card network i.e., Visa and Mastercard.
Fowler’s article sheds light on the many ways in which card networks share our personal financial information with other companies. In addition to connecting banks, these networks also engage in the practice of aggregating purchase data and selling it as market insights. Visa, for example, allows clients to access data on groups as small as 50 people, often tied to specific zip codes. Mastercard, on the other hand, has not disclosed the minimum size of the groups it targets. The collection and sale of personal financial data have become a lucrative business for these networks. As consumers, it is important for us to be aware of these practices and to take steps to protect our privacy.
Mastercard and Visa are two of the world’s largest credit card companies. They collect a vast amount of data on consumers’ purchasing habits and preferences. This data is shared with a wide range of businesses, from tourism bureaus to major tech companies like Google. Through their partnership with Google, Mastercard allows the tech giant to link the ads that people see online to their actual in-person purchases. This helps businesses better understand their target audience and tailor their advertising efforts.
Point of sale systems,
While retailers may not disclose a lot of information about who they share their customers’ data, it’s likely that the bank that processes transactions for the retailer also has access to this information. It’s important for consumers to be aware of this and to consider their privacy when making purchases. Additionally, it’s worth noting that other third parties may also have access to this data, depending on the specific circumstances of the transaction. As a result, it’s important for consumers to be proactive about protecting their personal information and to carefully review the privacy policies of any companies they do business with.
Mobile wallets are a convenient and secure way to store and manage your payment information on your smartphone. However, it is important to be aware that the information collected by these apps, such as your purchase history and location, can potentially be used to track your movements and habits. This information could be used for targeted advertising or potentially even against you in the event of a data breach.
Financial apps, such as those that track your purchases and manage your budget, can be a convenient and useful tool for managing your finances. These apps often collect a wealth of information about your spending habits and financial behavior. This information can be valuable to market research firms, retailers, and investors, who may be willing to pay for access to it. As a result, many financial apps will sell your data to these third parties to generate revenue.
Let us talk about this for a second. Loyalty programs collect data from their members in a variety of ways. When you sign up for a loyalty program, you may be required to provide personal information such as your name, email address, and physical address. This information is typically used to identify you and track your purchases and activities within the loyalty program.
Once loyalty programs have collected this data, they may share it with third parties for various purposes. For example, they may share your personal information with advertisers in order to show you targeted ads based on your interests and preferences. They may also share your data with other companies for research and analysis purposes.
Potential risks to consumers
While the specific uses of this data are not always clear, it is concerning to think about what it might be used for, and who might have access to it. Moreover, the trajectory of surveillance in China and other countries is very clearly heading in one direction, with increasingly personal information being collected and shared. It is therefore important for people living in even relatively free countries to take steps to protect their privacy and maintain control over their personal data.
Looking at a place like China, there is a strong alliance between the private and public sectors when it comes to data collection and sharing. In China, companies routinely collect data on individuals and share it with the government, often without their knowledge or consent. This includes information about people’s financial activities, which can reveal their habits, preferences, and lifestyles. This data has been used to create a massive social credit system that tracks and rates the behavior of citizens.
Even more concerning is the fact that if you use Gmail and receive email receipts for your purchases, Google automatically adds this information to a database that records your purchases. This means that your personal financial data is being shared with thousands of companies without your knowledge or consent. While you may not be too concerned about this information being shared, the potential consequences of this data sharing could be much greater than you realize.
How do we then protect our data?
Cash is a valuable and useful option for in-person transactions, as it allows individuals to make purchases without leaving a digital trail or sharing their personal information. This makes it an effective tool for protecting privacy, as it allows individuals to make transactions without leaving a record of their purchases or financial activities. In addition, cash is widely accepted and can be used in a variety of situations, making it a convenient and flexible option for making purchases. Moreover, cash is not subject to the same risks as digital payments, such as fraud or hacking, which can leave individuals vulnerable to monetary loss. Overall, cash is an important option for individuals who value their privacy and want to maintain control over their personal data.
Masking Credit cards.
In today’s world, online purchases are an inevitable part of life. However, this can create privacy concerns, as making purchases online often involves sharing personal information, such as credit card numbers and addresses. To protect their privacy, individuals can use services like privacy.com and mysudo.com, which allow them to create virtual credit cards that can be used for online purchases. These virtual cards mask the user’s real credit card information, making it difficult for advertisers and others to track their purchases.
In addition to protecting privacy when making purchases, it is also important to consider the privacy implications of making donations to causes or organizations that are important to you. Traditional payment rails, such as PayPal, are heavily guarded, and individuals may be banned from using them for donating small amounts to certain causes or organizations. This can limit your freedom to support causes that are important to you and can also make you a target for adversaries who do not support the causes you are involved with.
Cryptocurrency is a highly controversial mode of payment, but this controversy is rooted in the unique features of cryptocurrency that make it so appealing to some people. One of the key advantages of cryptocurrency is that it is “permissionless,” which means that it does not have to pass through any payment processes or centralized entities before reaching its destination. This allows individuals to send crypto directly from peer to peer, with no intermediaries collecting data about the transaction or blocking the funds.
This permissionless cryptocurrency makes it appealing for many reasons. First, it allows for greater privacy and anonymity, as transactions do not leave a digital trail that can be traced back to the individuals involved. Second, it allows for greater freedom and control, as individuals do not have to rely on third parties to facilitate their transactions. And third, it allows for greater security, as transactions are not subject to the same risks as traditional payment methods, such as fraud or hacking.
Cryptocurrencies, like Bitcoin, have often been associated with illegal and nefarious activities. In the past, we have seen state-sponsored actors and hackers use cryptocurrencies to conceal their criminal activities and steal from other nations. This has caused many governments and organizations to view cryptocurrencies with skepticism, and some have even rejected them as valid forms of payment. It is important to keep these risks in mind when considering using cryptocurrencies. However, it is also worth noting that cryptocurrencies can offer many benefits, such as faster and more secure transactions, lower fees, and more financial inclusion for individuals who may not have access to traditional banking systems. While it is crucial to be aware of the potential risks associated with cryptocurrencies, it is also important to consider the potential benefits they can offer.
Opting out of loyalty programs and marketing communications
Opting out of loyalty programs and marketing communications is one way to protect your privacy. When you opt out of a loyalty program, you are choosing not to provide your personal information to the program and therefore, the program will not be able to collect and store data about you. This can help prevent your personal information from being shared with third parties or used for marketing purposes.
Trying out alternative payment systems, such as cryptocurrency and virtual credit cards, is a crucial step in fighting against the financial surveillance that is pervasive in our society. By using these alternative payment methods, individuals can take control of their personal data and protect their privacy in the face of increasing surveillance and data collection.
However, it is important to recognize that the loss of privacy is a gradual process, and if we do not act now to protect our privacy, it may be too late in the future. If we do not make a conscious choice as a society to value our privacy and take steps to recover some of it, we may find ourselves in a very dark place where our personal information is widely available and subject to abuse. Therefore, it is so important to be proactive and start planning now for how we can recover more of our privacy and protect our personal data. By acting now, we can prevent the loss of privacy from reaching a point of no return.