Digital payments have taken the world by storm. Nowadays, nearly every major smartphone supports some sort of contactless payment system, and there are no shortages of services—most notably Android Pay, Apple Pay, Venmo, PayPal, and Bitcoin—which make use of the technology. Digital payments have been heralded as more secure and private than "traditional" payment systems, such as credit cards, cheques, and cash.
Often missing from the debate, however, are questions regarding the potential privacy implications of these new services. While it is true that Android Pay, for example, provides a greater degree of security than, say, a magnetic stripe card, it also brings with it serious privacy implications: Google will be able to track your purchases, and add additional dimensions to its psychological profile of you.
But payments have been tracked for a long time.
Google tracking purchases is nothing new. Gmail used to scan your inbox for purchase receipts and credit card statements, and anyone using Google Wallet should expect for every detail of their online shopping to be tracked.
Plus, many online shops include a Google tracking code on their site, allowing Google to track your online spending habits even when you pay with your non-Google Wallet credit card. Recently, Google has expanded its payment monitoring into the real world, partnering with enough credit card companies to be able to track upwards of 70% of credit card usage.
Purely digital payments, however, bring the tracking to the next level.
Still, it remains important to recognize that digital and contactless payments are still subject to the same privacy violations as the credit cards they ultimately fall back upon. Few users of digital payment services directly hook these services directly into their bank accounts (banks, as of right now, do not share payment information with advertisers) and instead connect their services to their credit cards, effectively nullifying any potential privacy protections that the payment service would have provided.
To be fair, the security advantages remain. If one's objective is to prevent vendors from stealing one's information or double charging, digital payments are an effective means of protection. However, if one's goals are to keep one's financial and spending information private, digital payment services offer little protection. In fact, the payment services sometimes even act negatively towards one's privacy.
To think that digital payment services only inherit privacy violations from credit cards would be naive.
While many of the privacy issues concerning digital payment services are inherited from the credit cards they usually fall back upon, many digital payment services have problems of their own: Google Wallet, for example, shares your payment information with its namesake, regardless of the credit card you're paying with.
In fact, the only digital payment system you can truly trust is the one unlike all the others: Bitcoin. It provides guarantees that its rivals simply cannot mirror. Your data won't be sold to advertisers, it falls back on no credit cards, is reliant on the value of no other currency, and is completely decentralized. And perhaps best of all, you don't even need to trust it.
Cover image: Mobile payment 03, from Wikimedia Commons.