One of the important factors about credit cards is that they account for usage. Banks and merchants must balance and settle every day. Records exist for every dime you spend, where you shopped, and how well you pay off your debt. In the U.S., the IRS may gain access with a subpoena to validate (or disvalidate) reported income. Stores of transaction data gets compiled by merchants to track you preferences. And, in many cases, you can return an item without the receipt if you can show your billing statement to a customer service rep.
Today’s read comes from Asian Review, and talks about how China has upped the ante on data.
- China’s e-commerce behemoth Alibaba Group Holding is quietly building a whole economic sphere based on the smartphone payments and services it provides.
- From online shopping, grocery stores and finance to health care, the online giant is moving into more and more services that affect many aspects of life through smartphones. In exchange for the conveniences on offer, however, users are giving up their personal information in unprecedented ways.
- Moreover, some of that data — which includes purchase history, personal interests and biometric authentication — can be accessed by the government, and is increasingly becoming a source of friction with the U.S.
Now, I enjoy McDonald’s drive-through as much as anyone else, but, really do I want them to predict my next order?…
- At a Kentucky Fried Chicken in the eastern city of Hangzhou, a student leaned toward a cash register to pay for her meal. Using facial recognition technology, the unmanned device processed the payment and displayed a “payment complete” message.
- Alibaba, which developed the register, holds data for biometric authentication, such as facial recognition data. The company holds data on some 600 million people, including purchase history, educational background, assets, records of hospital visits and drug prescriptions. It is also a world leader in technologies like artificial intelligence.
And, when you start connecting all this data, it gets a bit creepy. But last time we checked, my wife has an 805 FICO score; my personal score runs about 7% less because I like to apply and test out credit cards (and harvest reward bonuses).
- The company also assigns credit scores to users under a system called Sesame Credit, in which the score rises if, for example, the user owns a car or has good credit on a credit card. The higher the score, the more preferential treatment accorded to the user. The scores are also said to be used by employers for background checks and by families looking for marriage prospects.
Which is one of the reasons Europeans came up with the General Data Protection Regulation, which you can read about here.
Overview by Brian Riley, Director, Credit Advisory Service at Mercator Advisory Group