Private Payments & Payment Masking
What is Payment Masking?
Payment masking is simply a way to keep your financial information out of the hands of your bank, and in turn advertisers or would-be criminals. This can take the form of using cash or payment masking services, both of which will be discussed in this section.
Why do I Need Payment Masking?
Your bank and card issuers are selling your transaction data to data brokers, who use this information to infer out things like your income, net worth, and what you’re likely to buy. They can even determine things like where you live based on the geographic areas where you spend money. They then sell these inferences to marketing companies who use it to serve you targeted ads that are more likely to be relevant to you.
Aside from being highly invasive, this kind of information also poses a risk. Credit card information is highly vulnerable to being stolen in a data breach, and the economic information gathered about you (like income and net worth) frequently makes its way onto websites like Spokeo. Furthermore, many insurance companies are pushing for a world where big data - including your purchases - can determine things like your health insurance rates and coverage (Source, paywalled). Protecting your financial information is a critical part of protecting both your privacy and security.
Cash
The easiest way to protect your financial privacy is to use cash whenever possible. The advantages go beyond privacy. For one, cash has been proven to help people spend less, so it’ll save you money. Another is that it keeps you from overspending by removing the possibility. A common concern is that by carrying cash you make yourself a target for mugging, but remember that criminals don’t have x-ray vision or psychic powers. They don’t know if you’re carrying cash instead of cards or how much. One strategy is to figure out how much cash you’ll need during any given pay period - gas, groceries, entertainment, etc - and withdraw that amount at an ATM. Another strategy is to simply keep a set amount of cash on you - $100, for example - and replenish whatever you spent each payday.
Online Payments
Unfortunately cash rarely works in the realm of online shopping, which is generally unavoidable to some extent these days. Fortunately, new services have popped up to meet his need. The following are a list of virtual debit card services that I have collected in the course of my research. Note that none of these are anonymous; all of them are required to abide by various anti-fraud “Know Your Customer” laws which will require them to verify your identity to deter fraud, laundering, and tax evasion. Remember that these strategies are to protect against general data breaches, online theft of card numbers, and less sophistocated stalkers or attackers.
Some people may not be comfortable giving their bank information to a third party, or may live in a country where these services don’t operate. In those situations, I recommend using pre-paid gift cards or Visa vanilla cards paid for in cash. You could also consider seeing if your bank offers digital cards for online transactions. These will not shield your transactions from the bank itself, but can still be useful in helping to mitigate the damage from a data breach. As a last resort, you could consider using services like Apple Pay, PayPal, or other fintech services if they are accepted online. Again, these will offer little in the way of privacy but will protect your card information from being stolen in a data breach.
Listed in alphabetical order, not order of recommendation
Yes, requires paid plan
Yes
United States
Yes, requires paid plan
No
United Kingdom
Yes, requires paid plan
No
United States
Yes
No
United States
Yes, may require paid plan depending on location
No
Australia, Austria, Belgium, Bulgaria, Croatia, Republic of Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Italy, Japan, Latvia, Liechtenstein, Lithuania, Luxembourg, Malta, Netherlands, Norway, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden, Switzerland, the United Kingdom, and the United States.
Click here to see my criteria for selecting these services
Bitcoin & Cryptocurrencies
Cryptocurrency has exploded into mainstream popularity. I do like cryptocurrency. I think the principles it is founded on - decentralization, security, financial freedom, and equal access - are all great ideals, and I hope that cryptocurrencies, and blockchain technology in general, will continue to see improvement and adoption where it belongs. However, I caution most of my readers not to get too deep into cryptocurrency for several reasons.
For one, contrary to mainstream portrayals, most cryptocurrencies (including Bitcoin) are not anonymous or even private. Many websites exist that allow you to type in any Bitcoin address and see the exact balance for free. Plus, a Bitcoin can easily be traced along the chain of custody. The blockchain Bitcoin uses was never designed to be private, it was designed to be an open, transparent ledger focusing on security and decentralization. This is just one example. The problem is compounded when you get your cryptocurrency from a “KYC” or “Know Your Customer” exchange like Coinbase or Binance, which many people do.
Second, the sudden growth combined with the general ignorance of how cryptocurrencies work has made the cryptocurrency space rife with fraud and “get rich quick” scams. Coinbase alone lists over 10,000 cryptocurrencies available for purchase and trade on their site. I find it hard to believe that each one is designed to solve an actual problem or serve a specific purpose other than making someone money. Only a small few cryptocurrencies are genuine attempts to improve the space: faster transactions, cheaper transactions, privacy, anonymity, etc.
Finally, the volatility of cryptocurrency makes it dangerous and unfeasible to rely on heavily in spaces where a stable currency and easy access to banking exist. If you live in such a place, I only recommend small monetary investments in cryptocurrency as a hobby and just a little time spent keeping up-to-date on emerging trends. If you live in a part of the world where your currency is highly unstable and/or your banking system is not easily accessible, this advice may be different but is beyond the scope of this site.
To fully dive into the complexities of cryptocurrency falls far outside the scope of this website. It would take an entire other website to explain how they work, how to use them correctly, which ones are worth your time, and more. If you would like to learn more about cryptocurrencies, my two main recommendations are Privacy Guides’ cryptocurrency guide and Opt Out Podcast. I trust these resources to be rational and truthful to the best of their ability in a space flooded with sensationalism and exaggeration and to recommend helpful additional resources.