Impact of mobile point-of-sale payments apps on consumer privacy


Annik Bélanger-Krams


Option consommateurs




Smart phones are becoming increasingly indispensable in the daily lives of Canadians. Consumers can use them to download a wide range of applications designed to make their lives easier. For example, point-of-sale (POS) apps permit users to pay for their purchases without opening their wallets; they can even combine all their payment cards, gift cards and loyalty cards in one “electronic” wallet. In order for the POS apps to work, however, users need to supply a substantial amount of personal information, and this raises significant privacy issues. On the one hand, these applications are potentially problematic with regard to the disclosure and communication of important information, more specifically, the collection, protection and dissemination of personal information (as set forth in the privacy policy). On the other hand, the fact that they are used on a mobile support exposes users to the risk of third-party access to wide range of personal information.

To determine how well companies that supply POS apps inform consumers of these issues, Option consommateurs (OC) studied their privacy policies, and tried out all the POS apps likely to be used in Montreal during a given period. OC’s analysis revealed that many of the privacy policies are flawed. Sometimes they are difficult to access or are unclear, and sometimes they are poorly adapted to relaying information via mobile phone.

In order to get the pulse of consumers, OC held six focus groups of users of POS apps: three in Montreal and three in Toronto. The majority of participants were surprised at how much information these applications collect and share with third parties, to the point that some stated that they would consider changing their user habits.

Consequently, it is essential to have confidentiality policies that are transparent and easy to understand. Some, however, are not. Above all, companies should be required to improve their practices by showing respect for privacy issues throughout the entire process, starting with the design of the device itself (integrated Privacy by Design). Only then can consumers feel well protected, and only then can the confidence that should be a prerequisite to the mobile payment system be ensured.

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OCA Funded Research
This research received funding support through the Office of Consumer Affairs' Contributions Program.

Contact information

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Montreal, Quebec
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(514) 598-7288
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Source: Consumer Policy Research Database

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