Wednesday, April 25, 2012

Privacy Issues For Mobile Payments?

The popularity of smartphone has led to the rise of better payment technology. More and more companies are allowing customers to pay for products from their cell phones. Nonprofits are also jumping on the bandwagon, with the Girl Scouts of America (GSA) recently making their famous cookies available through mobile payments.

Yet, as The New York Times reported yesterday, this ease of use may be coming at price of reduced privacy. The Center for Democracy and Technology (CDT), a Washington, D.C.-based nonprofit that focuses on technology laws, recently published a blog post expressing its concerns about mobile payment technology.

One of the organization's issues with this technology is that it can expose payment data to more parties than if you paid with a credit card. For example, when you use Google Wallet your information is not only given to Google, but also to credit card issuers and payment processors. Third-party applications can also potentially get a hold of this data. All of this information comes in small bits but once it is all combined, companies have a very detailed file from which to work.

Another issue comes in the form of telemarketing. Users can still get these unwanted calls even if they are on the national do-not-call list if they use mobile payments. Why? If a mobile payment app collects a user's number, the merchant can make phone or text solicitations.

CDT urged companies to put stronger privacy protections into their mobile payment services if they want to gain the trust of consumers.

You can read the full story in The New York Times.

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