As we increasingly move toward a cash-less society with the help of instantaneous payment apps like Venmo, Google Pay, Apply Pay, and credit card-specific smartphone payment apps, we’re at risk of hindering our democracy. How so?
Perhaps this isn’t a major concern in the United States yet, but the protests in Hong Kong have brought to light a concerning issue in regards to personal privacy and cash-less payments. In Hong Kong, there’s something called an “Octopus Card,” which is distributed by a financial company owned primarily by the government of Hong Kong. Most residents of Hong Kong rely on this card to pay for everything from groceries to clothing, but in wake of the protests, people are worried that the government could be tracking their location and financial activity with the help of the Octopus Card.
Although the U.S. government isn’t heavily involved in the cash-less payment markets (yet?), it’s nevertheless concerning how much of a privacy violation these smartphone apps could be. After all, a privacy researcher in Berlin managed to analyze over 18 million Venmo users’ information related to more than 208 million public transactions because the users never changed the app’s default settings to private. This means that many users could be inadvertently sharing their purchasing habits, location, lifestyle choices and other personal information with literally anyone who can access and browse through the app.
As we strive to improve consumer convenience with cash-less payments, individuals’ privacy, freedom of speech and even freedom of assembly could be at stake. Let’s examine this issue further:
Surveilling Your Financial Activity
As an article in The Atlantic points out, “In a cashless society, the cash has been converted into numbers, into signals, into electronic currents. In short: Information replaces cash….and wherever information gathers and flows, two predators follow closely behind it: censorship and surveillance.”
Another article from Ars Technica in 2018 similarly argues that Venmo (and other cash-less payment systems like PayPal) are frequently criticized by consumer groups and even targeted by the Federal Trade Commission for consumer privacy violations. Since the default setting for many apps’ transactions is “public,” users could be unwittingly sharing their personal financial activities with anyone who wants to view them. This, in turn, could lead to serious issues related to surveillance if the government or other entities can see how much your spending on what at any given point (your entire payment history is also public on the default setting).
Another concern for individual privacy rights advocates is the potential for governments to track where consumers are spending their money. Some payment apps keep location records on their users (how detailed and how long that information is kept remains unknown).
As we can see from peoples’ personal experiences with civil asset forfeiture laws, there’s tremendous potential for abusing individuals’ privacy, freedom of expression and freedom of assembly if just about anyone can view their financial and location records at any time. As more and more consumers rely on cash-less payment apps, we need to do more as a society to ensure their rights will not be violated in the midst of everyday financial transactions.