Mobile Wallets and Privacy
April 17th, 2015 - Posted by John Doornbusch
As mobile wallets and payment options continue to grow, retail organisations are seeing increased opportunities to collect customer data and track usage patterns to be used for targeted marketing and promotions. To achieve this they offer their customers a branded digital wallet with inbuilt “loyalty” functions, allowing them to collect data on individual customer’s purchasing patterns, and in return offer discounts, bonuses, and promotions. A customer’s mobile phone is the perfect device to use to access the digital wallet, and onto which to push targeted advertising and marketing messages.
A recent report from Forrester stresses the importance of mobile wallets as rich marketing platforms, offering unprecedented access and reach to consumers to drive customer engagement and sales.
Such finely tuned advertising and marketing requires analysis of buying patterns, habits, and behaviour. And this requires access to a lot of data collected over a period, some of which may be quite personal. So some questions naturally arise:
- What data is collected?
- How securely is it stored?
- Who can access the data?
- What processes are in place to cope with a data breach?
These questions should be explicitly addressed by any retail organisation that collects individual customer data, whether through a traditional card-based loyalty scheme or a mobile wallet.
While many Governments have already legislated to force organisations to be accountable by providing notification of data breaches, there is still much to do regarding the full and open disclosure of what customer data is collected, how securely it is stored, and how it is used. Customers have a right to privacy, and a right to know what data is being collected about them and how it is being used.
There is a fascinating article from the New York Times here: How Companies Learn Your Secrets. This shows the extent of the data and analytics available to retailers today, even without mobile wallets.