Pay Cashless and Be Clueless About Your Data?

Navigating Tensions of Data Use in Digital Payments

Abstract

This article analyzes the use practices of payment data along the payment processing chain in Europe. By first mapping the key actors involved in digital payments and their data use practices, this research offers novel insights into the multiplicity of actors that intermingle when a digital payment is made. The findings are interpreted through an adaptation of Zygmuntowski’s data governance trilemma, which seeks to balance three objectives in the context of payment data: preserving privacy, monetizing data, and enabling law enforcement. The article shows that the widespread interest in data does not stop at payment data. Preserving privacy is difficult to pinpoint due to the opacity, lack of transparency, and complexity of the data processing behind a digital payment. Meanwhile, monetizing data is a core practice for many actors, although it is pursued with varying levels of vigor. The growing availability of data poses significant risks, as information initially collected for payment processing may be used to enable law enforcement. Promising alternatives such as Wero and the digital euro could help curb the dominance of non-European players, increase transparency, and offer data-minimizing payment options.