5 Approaches to Data Transparency in Payment Transactions
The rise in digital payment methods has led to a proliferation of data generation, triggering heightened consumer expectations for responsible data handling and a demand for transparency. Prioritizing privacy initiatives to meet these expectations can help businesses maintain consumer trust and access privileges, potentially making them a meaningful return on investment.
Responsible data management requires a commitment to continually refining and communicating the way data is collected and used. These five guidelines can help businesses ensure they are doing everything possible to maintain positive consumer relationships and trust in the age of big data.
1. Set standards internally
Responsible data usage and transparency must be cultivated from within. Data should serve a clear purpose for the businesses, consumers, and transactions that generate it. This can be achieved by establishing data principles and guidelines that ensure awareness is ingrained in every project and initiative. When crafting these guidelines, businesses should consider setting standards that:
- Clearly communicate values and goals for data use
- Engage stakeholders in crafting policies and practices
- Put privacy at the center of data policies and practices
- Ensure transparency about how data is used and protected
These principles can be used to build internal processes around data to ensure consistency in its collection, storage, and use—including training employees to use data responsibly—so that everyone who works with it knows how to use it ethically and effectively.
2. Be choiceful and transparent
In the realm of data collection, sometimes less can be more. Being selective about what data is gathered may yield better results than creating a glut of unnecessary data. To avoid collecting more data than needed, it is important for businesses to focus on the key data points that are vital to their business and its initiatives. Being discerning about data collection and use can help reduce storage needs and keep analysis costs low—plus, it goes a long way toward ensuring consumer trust.
Transparency is also key when building and maintaining trusting relationships. While many people are vaguely aware of data collection practices, the specifics remain unclear. Using straightforward language to explain data collection and protection during payment transactions can help build trust with customers, vendors, and other partners.
For example, a transparent privacy statement on the Discover® Global Network website invites users to peruse detailed yet easy-to-digest information about how and why user data is collected, stored, used, and shared. The statement even includes a section on how users can manage their online privacy choices so they can easily elect to change what data they choose to share.
3. Give users control
In an economy where customer data provides businesses with a competitive advantage, gaining and retaining customer confidence is key. While most consumers understand that their digital activity is under surveillance to some extent, they may not be entirely confident in data collectors using their information responsibly.
A 2023 survey of consumers by the International Association of Privacy Professionals found that only 29% of their respondents said it is easy for them to understand how well a company protects their personal data, while 64% said that when companies provide clear information about their privacy policies it enhances their trust.1
With that in mind, it’s easy to understand why consumers may feel more comfortable buying from businesses that make them feel like they have control over their information. One way to do this is to let consumers decide how, where, and with whom their data is shared when they connect their financial accounts to an app, service, or website to make a purchase.
There are three main types of data that may be collected by businesses:
- Self-reported data, which includes user-supplied identifiers like e-mail addresses, age, and gender;
- Digital exhaust, which is the trail of data people create when interacting with websites and apps;
- Profiling data, which combines self-reported data, digital exhaust, and other data to predict behavior.
Businesses should also be clear about how customers’ data will be used. For example, will it improve a product or service, inform targeted marketing, or be sold to third parties?
4. Make the value exchange clear
In addition to ensuring customers understand how their data is collected and used, businesses should also try to communicate how consumers may benefit from sharing their data. While the value may be obvious to the business collecting the data, it may not be easily understood by customers. It is also important for businesses to understand that people often place a higher value on the detailed data that firms collect through analytics and sell to third parties than the basic information they share voluntarily.
One of the biggest ways customers benefit from sharing their data comes in the form of customized user experiences on websites and apps. Take for example the music service Spotify which gathers data on what songs users like and dislike to create a tailored listening experience. The more data the user provides, the more accurate Spotify’s music recommendations become.
Help your consumers understand how their data is used to create personalized shopping experiences, product recommendations, and communications, continuously improving and evolving the customer experience businesses deliver. Let them know that, without consumer data, these personalized experiences simply would not exist.
5. Conduct ongoing checks
The digital payments world and the technologies that drive it are constantly in flux. Legal parameters and cultural sentiments around data shift frequently, too. For these reasons and others, it is important that businesses conduct regular audits of their data transparency practices and procedures.
These data audits can help businesses ensure that sensitive information is handled responsibly, effectively, and efficiently. They can also help refine data practices by identifying opportunities to:
- Continually improve communication with customers
- Strengthen compliance with regulations
- Improve transparency
- Act on potential vulnerabilities
Give consumers a reason to trust you and they will
When it comes to data, what’s good for consumers is good for business. Data transparency is key to giving consumers confidence that their information will be used fairly and ethically, which gives them the peace of mind they need to feel comfortable sharing it.
At Discover Global Network, we are committed to using customer data responsibly and transparently. See how we’re using the latest technology to provide seamless payments experiences that respect how customers want their data to be used by visiting discoverglobalnetwork.com.
1. Fazlioglu, Müge. International Association of Privacy Professionals. (2023, March). Privacy and Consumer Trust. Accessed 13 June, 2024 from https://iapp.org/media/pdf/resource_center/privacy_and_consumer_trust_report_summary.pdf
The information provided herein is sponsored by Discover® Global Network. It is intended for informational purposes, and is not intended as a substitute for professional advice.