Two billion credit card holders have just discovered that their transactions are being used to track their offline shopping habits in a deal brokered between Alphabet Inc.’s Google and MasterCard. After four years of negotiations, the two companies settled a secret deal that would help Google to test the effectiveness of online ads and link them to in-store purchases – an information gap for most retailers and brands.
Google had initially hoped to gather such data through its mobile payments service, Google Wallet, but the service’s low popularity pushed the internet giant to seek out partnerships to fill the data gap. Since 2014, Google has been using Google Maps’ Location History feature to inform merchants if a shopper visited a store after viewing an ad online, but the data flow still stopped at the checkout counter. Later, Google started allowing merchants to upload customer emails as a means to track their behavior, but it’s only since credit card data was made available that the ad-to-checkout cycle came full circle.
In 2017, Google introduced “Stores Sales Measurement” which includes two components “the first lets companies with personal information on consumers, like encrypted email addresses, upload those into Google’s system and synchronize ad buys with offline sales. The second injects card data” write Mark Bergen and Jennifer Surane for Bloomberg.
Millions were paid by Google to access this data and there were discussions on how to share revenues between the credit card company and the internet giant. There are numerous privacy concerns. As Christine Bannan of the Electronic Privacy Information Center (EPIC) states, “people don’t expect what they buy physically in a store to be linked to what they are buying online.” The advocacy group sent a complaint to the US Federal Trade Commission a year ago.