More consumers are turning to digital channels to make daily purchases as the pandemic continues. Emerging data privacy and open banking rules meant to regulate these digital transactions are thus being put to the test as consumers familiarize themselves with — and question — the standards intended to keep their personal data safe.
Regulations governing the sharing of medical information appear to be of primary importance for consumers, with 70 percent of Americans noting that they would switch healthcare providers if they discovered that their data was inadequately protected. Many are also questioning how merchants and retailers are interacting with their data. Regulators as well as retailers are therefore confronting these queries, especially as changing data privacy opinions begin to influence how and where consumers are spending their time and their money.
In the latest Merchants Guide To Navigating Global Payments Regulations, PYMNTS analyzes how the pandemic is affecting consumers’ data privacy and security perceptions and opinions worldwide. The Tracker also examines how regulators are analyzing these changes and what they mean for merchants looking to keep their increasingly digital consumer bases engaged, trusting and transacting.
Around The Data Protection World
Data privacy is gaining more attention from consumers in multiple markets, including the European Union and the United States. A study of U.S. consumers found that 87 percent feel data privacy should be considered a human right, for example. Many respondents are also wary of what businesses are doing with their information, with roughly 70 percent of consumers stating that they do not trust companies to sell their data ethically. Such trends are leading businesses and regulators to reconsider the country’s existing data privacy and security standards.
Data security is also being debated in the EU. The region’s General Data Protection Regulation (GDPR) that governs online data collection and storage has been in place for approximately two years, but large companies are more frequently coming under regulatory scrutiny as consumers become more familiar with the rule. Google-owned video streaming service YouTube, for example, is currently facing a lawsuit over whether its data practices violate GDPR. A suit alleges that the platform fails to comply with GDPR because it collects data from minors, who cannot legally consent to sharing their digital information under the regulation GDPR. YouTube could face billions of dollars in fines if its practices are found to be out of step with the EU’s privacy requirements.
Another company that recently came under GDPR fire in the EU is fashion retailer H&M. A German court recently ruled that its methods of collecting employees’ data violated GDPR protections. The Hamburg Data Protection Authority found that the retailer was storing employee-related personal information — including details about their interpersonal relationships, medical history and religious beliefs — and then using this data during performance reviews. Both practices fall out of bounds of the data privacy protections granted to EU citizens under GDPR. The court fined H&M 35.3 million euros ($41.7 million) for the infraction.
For more on these stories and other headlines, read the Tracker’s News & Trends.
Why Merchants Must Stay On Top of Data Privacy Trends
Consumers worldwide began branching out during the pandemic’s first few months, leveraging alternative transaction methods like contactless payments at brick-and-mortar stores or making more online purchases. Fraudsters have followed consumers onto digital channels, however, meaning that the latter are placing new weight on the security standards their chosen businesses or banks employ to safeguard their information.
Staying abreast of consumers’ changing data privacy perceptions is thus crucial to capturing their attention and trust, Michael Reidbord, president of retail technology organization Fashion Tech Consortium, said in a PYMNTS interview.
To learn more about why understanding data privacy trends during the pandemic is essential to merchants’ survival, visit the Tracker’s Feature Story.
Deep Dive: How Falling Behind On Open Banking Regulations Could Cost Merchants Consumers’ Trust
Growth in eCommerce and online banking is also prompting consumers to reassess which data they share online, and many are questioning which organizations or individuals are responsible for protecting this information.
Regulators in multiple global markets are also taking notice of consumers’ online security concerns, leading to renewed debate over how personal information is collected and stored. eCommerce merchants that wish to keep consumers engaged and transacting must therefore reassure these customers that their digital data is secure, a task that could prove difficult as data privacy and security regulations shift.
To learn more about why merchants must keep pace with evolving open banking and privacy regulations to keep consumers’ trust, visit the Tracker’s Deep Dive.
About The Tracker
The Merchants Guide To Navigating Global Payments Regulations, a PYMNTS and Ekata collaboration, is the go-to monthly resource for updates on the trends and changes regarding PSD2 as well as other privacy and data protection regulations.