Digital Transactions Authoritative, insightful and timely information for payments professionals
Beginning next summer, PayPal Holdings Inc. will begin sharing more personalized shopper information with merchants, as outlined in its recently updated PayPal Privacy Statement.
Data such as products, preferences, sizes, and styles will be shared with merchants to “help improve your shopping experience and make it more personalized for you,” the updated privacy statement says. “The key update to the Privacy Statement explains how we will share information with merchants to personalize your shopping experience and recommend our services to you.” Though the update says PayPal will begin sharing the data next summer, no specific date is provided.
Most PayPal users will be automatically opted in, except for those in California, North Dakota, and Vermont, who must give PayPal permission to share this data. Users in other states can opt out.
It is uncertain, though likely, that this move is tied to the creation of PayPal Ads, an advertising platform PayPal announced in May. PayPal hired an executive from Uber and one from Plaid to lead the platform. Part of PayPal Ads will include the PayPal advanced-offers platform, which uses customer data to create more refined consumer offers.
PayPal says it regularly updates its user agreement and privacy statement as “it evolves its strategy and develops new products. “This update informs U.S. consumers how PayPal will use information, such as sizes and colors, to share personalized product recommendations, rewards, and offers with merchants for the benefit of our mutual consumers. We provide our consumers with choice so they can update their information-sharing preferences in their account at any time,” a PayPal spokesperson says.
That PayPal would seek ways to monetize its users’ data is not out of the norm, says Cliff Gray, principal at Gray Consulting. “This has been going on for a while,” Gray says of overall efforts to sell user data. PayPal did not disclose the pricing structure for making this data available to merchants.
When implemented, the data sharing likely will be aided by artificial intelligence tools, Gray says. “The reality is when we buy stuff it’s going through the cloud. Like it or not, everything in the cloud goes through AI,” he adds. PayPal has not said whether AI tools will be part of the personalization platform.
This type of data sharing is not unique, Gray says, and is done because someone—whether it’s the brand or its partners—benefits financially from the action. “I guarantee there’s a financial reason to do this,” he says.
PayPal has steadily developed new products and services since Alex Chriss became its chief executive a year ago. A significant part of that effort, as summarized in the October issue of Digital Transactions, has been focused on merchants.
