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    Update on the Mining of Credit Card Users’ Data for Marketers

    We’ve discussed targeted behavioral advertising before in the context of online and offline data collection and tracking of the habits of consumers. There have been numerous news stories about this surveillance issue. For example, after the Wall Street Journal reported last year that credit-card companies Visa and MasterCard “are pushing into a new business: using what they know about people’s credit-card purchases for targeting them with ads online,” Sen. Jay Rockefeller (D-W. Va.), chairman of the Senate Commerce Committee, wrote to both MasterCard and Visa asking about the report.

    Now, the Financial Times reports that MasterCard is using the data it has on credit card users to assist marketers with targeted advertising to those credit card users:

    MasterCard is analysing transaction data to help marketers direct targeted advertising at consumers, after launching a controversial initiative to make money from its vast database of retail purchases. […]

    MasterCard first explored the possibility of using customer data for targeted advertising last year, but delayed those plans because of legal and regulatory concerns over how financial services companies use the customer data they have collected.

    According to an online sales pitch titled “Leveraging MasterCard Data Insights to Reach Holiday Shoppers”, MasterCard analyses billions of transactions – noting, for example, which consumers are more likely to purchase consumer electronics or luxury goods. “The foundation of all of our solutions is transaction data,” Susan Grossman, MasterCard’s senior vice-president of media solutions, said during the pitch, which has been viewed by the Financial Times.

    MasterCard, which confirmed that it launched the initiative in February, told the FT it was “committed to protecting individual privacy”. It said the information it sells to marketers is anonymous and is aggregated into groups of potential customers – rather than broken out individually.

    The company said the transaction information it collects includes credit card numbers – which it does not share with advertisers – but not cardholders’ names or other personal details.

    MasterCard said that the product is US-based, and transaction data from cardholders outside of the US is not being used. […]

    The fast-growing industry is raising concern among federal regulators and policy makers. Last week the US Senate Commerce Committee launched an investigation into the practices of nine consumer data brokers.

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