Mobile Wallets—And Receipt Digitization Firms—Could Send Your Data Right To Your Rivals

The Holy Grail of customer relationship management—or, given your perspective, The Black Hand Of Death of CRM—is cross-chain transparency. That's where you see not only every transaction from your customers within your own chain but also everything they purchased from every one of your rivals and when. The potential for this type of transparency will exist with the various mobile wallets being pitched, but an even more likely and more frightening source of this data will be companies that are offering to digitize paper receipts.

Whether such a possibility is good or evil depends on whether you are salivating over seeing your rivals' transactions or envisioning your rivals seeing all of your transactions. Officially, none of the mobile wallet players—including Google, PayPal and ISIS—has threatened to sell peeks at your transaction receipts to your rivals, although no one is willing to rule out future revenue sources. But the smaller vendors that are offering your customers free digitization of their paper receipts—and usually an offer to also store any already-digitized receipts—are the more likely sources of this cross-merchant data.

Why? First, their deals are with the consumers and not the retailers, so they are much less likely to contractually waive that option. Second, consumers won't object as long as they are promised some level of anonymity through aggregation.

Of course, it will only take one vendor who will make no such promises—or will make the promise but then violate it—for that data to eke out. And once it does, that will open the door to making it easier for the larger vendors to do the same.

Mobile wallets are wonderful things and absolutely worth participating in. But remember that, to an extent never before attempted, these digital wallets are houses of data ill-repute. Unlike the Data Roach Motels, data goes in and it does come out. You simply don't know where, nor will you have any control over that where.

The wallets and the receipt digital repositories will all be under the control of third-party vendors, whose investors expect them to monetize the data the best they can. Many of the players involved—Google, PayPal, Visa, MasterCard and ISIS, among others—have had access to data from business rivals from years and never gave into the temptation to sell it.

But the smaller and newer players have no such history. And the dollar value of that data could prove mighty tempting, especially if other revenue sources run tight.

Some of this will be out of your control. If your customers let obscure companies digitize all of their receipts, there's not much you can do beyond educating your customers. Some of that education should be legitimate security warnings—that an unscrupulous firm could even sell such data to cyberthieves and identity thieves, who would love to have such an easily accessed database of full transactions and partial card numbers. And if just one small retailer happens to violate FACTA and print the full number, they've hit the cyberthief jackpot.