The Globe and Mail recently reported that many experts are having increased concerns over cashless payments as Canada shifts to a cashless society. With the constant growth of credit and debit card payments as well as online transactions and digital wallets, cash is being replaced, quickly. In fact, as reported only 12% of POS payments in Canada were with cash and some banks are forecasting that by 2030 only 10% of all transactions will be with cash.
While cashless payments may make the payment process move faster, it does increase security issues as well as privacy concerns. These security issues include increased vulnerability to hacking, data breaches, and customer data sharing with third parties.
Of note, one of the major concerns with digital payments is that it creates a digital footprint that includes customers’ data such as their identity, financial information, location and time of purchase and more. While in many cases this basic information may be harmless, some of this information could be used by criminals to identify wealthy targets or try to blackmail customers that may have purchased something embarrassing which while legal, they might not want other people to find out about (e.g., Ashley Madison 2015 data hack). Purchase data can also be used by companies to predict sales and future behavior or at times sold to third parties.
As the Globe and Mail report, every non cash purchase leaves a digital trail; something cash does not. Therefore, it is important that business owners take extra steps to protect their customers purchase history data from potential hackers or individuals that may use it to commit crimes. Furthermore, business owners have a responsibility, and in a growing amount of countries a legal responsibility to not only protect customers’ data but to also not violate customers privacy by using or selling their data without customers consent.