A View from Washington: More Privacy Laws Inevitable

A View from Washington: More Privacy Laws Inevitable

A View From Washington: More Privacy Laws Inevitable

Scott Talbott

Scott Talbott

Scott Talbott, J.D., C.P.A., is SVP of government affairs at the Electronic Transactions Association. He is an experienced policy advocate and communicator with two decades of experience in Washington.

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Privacy is a big issue for policymakers in Washington, D.C. and in state capitals across the country. Prompted largely by the number of missteps by large tech firms that interface with Americans, politicians are racing to draft new rules and restrictions on how companies should protect the privacy of their customers.

As participants in the global payments industry, we touch customers' personal information, transaction data and account numbers every day. As a result, we are on the frontline for protecting consumers' privacy and will be affected by new privacy laws. Businesses will have to make adjustments — implement new security measures, draft new contract terms and maintain a near constant state of readiness. All of which will require more resources.

In broad strokes, the privacy bills are focused on four main themes:

  • Create new consumer rights
  • Create new disclosures to explain the rights
  • Impose new requirements for data security
  • Create new legal risks for non-compliance to help ensure compliance

There are also important themes for policymakers to consider as they modernize the privacy regime:

  1. Uniformity. Given the reality that all a merchant needs to be open for business around the world is a website, new policies should account for this. To address the vast reach of the internet economy, new privacy policies should be uniform across the country. Uniformity provides certainty and consistency.

  2. Flexibility. Technology changes. Products and services change. Fraud changes. Privacy laws should be flexible in order to account for these inevitable changes. Utilizing principles, rather than bright line rules, will help to achieve this goal and prevent the rules from being quickly outdated.

An illustration sharing how privacy bills are focused on four main themes.

  1. Fraud and Privacy. A very important aspect of protecting privacy is the fight against fraud. In its never-ending effort to fight fraud, the payments industry has deployed new technologies such as tokenization, EMV and fraud scoring. These ongoing efforts serve to protect both the security of the transaction as well as the privacy of the data and the consumer.

    This is an important fact of privacy, and new laws should provide a permissible use of the data to fight fraud. We see many privacy laws across the globe, such as the General Data Protection Regulation (GDPR) in Europe and the Personal Information Protection and Electronic Documents Act (PIPEDA) in Canada. These statutes include language that prevents laws from hindering the players in the financial services industry as they continue to fight fraud.

  2. Global Harmonization. The final theme for U.S. policymakers to consider is existing laws around the globe. Just as we need uniformity across America, we need it around the world too. Many companies operate globally, so it is important for privacy laws across the globe to work together.

A closer look at privacy laws

  • United States. During 2019, more than half of the states introduced privacy bills. In California, the legislature was the first to enact a new privacy law, the California Consumer Privacy Act (CCPA), which goes into effect in 2020. The CCPA will affect how businesses collect and use consumer data and applies to any company that does business in California.

  • Europe. The EU enacted its privacy law, the GDPR, more than a year ago. GDPR set one privacy standard across the member states and companies doing business within EU states.

  • Canada. Canada has begun a rework of its privacy law – the PIPEDA. In May 2019, the Minister of Innovation, Science and Economic Development announced Canada's new digital charter that attempts to strengthen consumer trust in the modern, digital economy and starts the process for modernizing their existing privacy laws.

Privacy laws help protect consumers and are an integral part of today's landscape for doing business.

The statements and opinions of the writer do not necessarily reflect those of TSYS.

Other Articles by Scott

Scott Talbott

Scott Talbott, J.D., C.P.A., is SVP of government affairs at the Electronic Transactions Association. He is an experienced policy advocate and communicator with two decades of experience in Washington. Talbott has represented the largest financial services firms in the country before Congress and federal regulators, most notably during the fiscal crisis. He is also an expert on communication, appearing regularly on national and international media. He has been called the voice of the financial services industry and one of the most recognizable faces in the industry.

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