Digital Payment Apps are Convenient and Accessible — But They’re Not Protecting Our Privacy
Money is often not the first thing that comes to mind when we talk about privacy. But a case before a federal court in California suggests it should be.
In January 2023, a class of plaintiffs represented by immigrant and racial justice organization Just Futures Law sued the Department of Homeland Security and several of the world’s largest money transfer businesses, including Western Union, for engaging in widespread financial surveillance aimed primarily at immigrants in the Southwest. As an investigation by Senator Wyden (D-OR) in March 2022 had revealed, U.S. Immigration & Customs Enforcement had for years used a massive database to spy on millions of money transfer records. Without a warrant or court order, hundreds of federal, state, and local law enforcement agencies accessed that database, subjecting millions of people to financial surveillance — and as a result, potentially deterring migrants from sending home the remittances that are essential to their loved ones’ livelihoods.
The court is considering whether Western Union and its co-defendants are “consumer financial institutions” subject to the Right to Financial Privacy Act (RFPA), which creates strong protections over personal financial records. (Because of the Third-Party Doctrine, constitutional Fourth Amendment protections become moot when a person voluntarily shares information with a third party, like a bank, so RFPA fills that gap with statutory protections.) If the court decides they are consumer finance institutions, then the government would no longer have access to the records. But if the court agrees with Western Union and rules that RFPA applies only to traditional banks and lending institutions, the ruling will leave those dependent on money transfer institutions — primarily U.S. immigrants and low-income, minority Americans — without the robust protection afforded by RFPA.
Even if the court concludes that money transfer businesses are consumer finance institutions under the RFPA, the Act’s applicability to Venmo, Cash App, Paypal, and other popular peer-to-peer digital payment apps that don’t resemble traditional financial institutions will remain an open question. That’s bad for most Americans — 64% of Americans use digital payment apps — but it’s especially bad for the people who rely on on these apps not just to pay friends back for dinner, but to maintain their livelihoods: undocumented immigrants, as well as unhoused and low-income Americans who lack access to banks, gig and self-employed service workers who depend on direct income and tips, organizers and non-profits that depend on small charitable donations, and the countless people facing economic hardship who depend on the mutual aid of online strangers to pay for rent and hospital bills. In other words, many of the people who are already both over-policed and in precarious financial situations are particularly vulnerable to financial surveillance.
Concern about the breadth of government financial surveillance is not speculative. Just last month, Atlanta police and the Georgia Bureau of Investigation arrested three board members of the Atlanta Solidarity Fund, a non-profit that provides activists with bail funds, legal representation, and jail support that has been at the forefront of supporting #StopCopCity protesters. Probable cause for the arrest warrants was based on personal PayPal records, suggesting that financial surveillance could be used to find pretext–in this case, patently absurd charities fraud and money laundering charges — needed to go after otherwise protected speech and association.
As the country reflects on a year of post-Dobbs reality, it is worth noting that financial surveillance could also be a major threat to reproductive rights. Payment data can reveal the purchase of pregnancy tests and abortion pills, out-of-state travel to abortion clinics, and abortion services themselves. But many of the anti-abortion laws passed in the wake of Dobbs don’t just criminalize abortion seekers, they also criminalize anyone who aids an abortion seeker — that could include people who donate money to abortion funds. Similarly, under Florida’s extreme ban on gender-affirming care, financial surveillance could lead to the criminalization of mutual aid funds that finance trans individuals’ access to hormones and gender-affirming surgeries.
In recent years, privacy and civil rights advocates, the media, and even courts have honed in on the specific danger of government surveillance that utilizes location data. In the landmark privacy case, Carpenter v. United States, Chief Justice Roberts warned that “[a] cell phone faithfully follows its owner beyond public thoroughfares and into private residences, doctor’s offices, political headquarters, and other potentially revealing locales,” concluding, “when the Government tracks the location of a cell phone it achieves near perfect surveillance.” But this is also the reality of financial data: whether we like it or not, the world revolves around money. And money tells a story — the causes we care about, the people we associate with, the services (whether banal or deeply private) we engage in, and even our immigration status. Shouldn’t it be up to us to decide what parts of ourselves we share, and with whom?
A ruling against DHS in the money transfer lawsuit would rightfully afford immigrants the ability to send money home without fear of creating a paper trail that could lead to deportation. But as recent events demonstrate, the need for financial privacy is urgent, and it extends far beyond the world of remittances. That means that Congress needs to act now, by amending the RFPA to make clear that “consumer finance institutions” include non-traditional financial service companies like Western Union, and digital payment companies like Venmo.
