A new Apple patent involving ad targeting technology has tech blogs abuzz.

The headlines are spooky:

  • Apple may check your credit card balance to show you products you can afford
  • Apple is working on a new e-commerce system based on your credit card balance
  • Apple patent serves ads based on credit card balance
  • Apple may start showing ads based on your credit card balance

Indeed, Apple's patent does suggest that in one embodiment of its invention, the source of available credit data "may be a bank or credit card company." But is this really possible? In short, the answer is no, there's no easy way for a company like Apple to obtain a consumer's balances from a bank or credit card company through other means.

A merchant, for instance, cannot retrieve the balance for a customer's credit card, even if it has the customer's credit card number on file.

Banks and credit card companies typically report credit card balances to one or more of the major credit bureaus, so this information is available on consumer credit reports, but consumer credit reporting is highly regulated.

It's inconceivable that Apple would have a permissible purpose to obtain credit reports for ad targeting, even if it wanted to.

Credit bureaus have incorporated their data into ad targeting initiatives, but contrary to the headlines associated with these initiatives, they involved aggregated, non-personally identifiable demographic data and not the targeting of individual consumers, which would almost certainly be illegal.

Not a bad idea

Apple does have potential sources of purchasing power data. For instance, it could use the pre-paid balances associated with its gift cards to target consumers. This is a much smaller audience, of course, than the universe of consumers with bank and credit cards.

Despite the fact that it probably won't be able to target consumers based on bank and credit card balances, the motivation behind Apple's patent, to ensure that consumers don't see ads promoting products and services they probably can't afford, is something many advertisers should give more thought to.

So much advertising today is focused on whetting consumer desires, even when that desire is not realistically going to be translated to sales because consumers can't afford the products and services being promoted.

They might not be able to pull data from credit reports, but advertisers do have increasing access to first and third party data that can help them infer which consumers can actually afford their wares. More should probably look to use it.

Patricio Robles

Published 4 August, 2015 by Patricio Robles

Patricio Robles is a tech reporter at Econsultancy. Follow him on Twitter.

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Comments (2)

Pete Austin

Pete Austin, CINO at Fresh Relevance

The notion of targeting ads "based on your credit card balance" is a non-starter because most people have several credit cards and also use cash. Even if Apple had full knowledge of the balance of a single credit card associated with Apple Pay (for example) this would not tell them the user's total available balance.

The best they can do is predict their clients' likely future spending, based on their prior transaction history and profile, just like shopholders have been doing in the real world since commerce began.

over 2 years ago

Rob Fernandes

Rob Fernandes, Payments Product & Strategy at WePay Ltd

Whilst I have no doubt Apple will avoid the PR disaster, I'm not sure you can describe the patent theory as inconceivable - it's anything but.

Apple has established formal relationships with the card issuers so in the most general terms anything is possible with additional integration. But far closer to home there is evidence that this sort of capability is in fact quite within reach.

Domestic card networks and protocols are often shared between card authorisation and ATM networks - not least here in the UK. The specification is there in the case of a debit card to use the same rails to establish balance as to debit funds from a card.

Even more immediately, smart businesses are ALREADY targeting their consumers by the type of card product they have. Visa and MasterCard segment their card products by more than just Credit/Debit, there are quite a number of segments within Credit.

These typically reflect spending power, credit worthiness. There are already payment gateways that actively provide this insight back to merchants after a card is used, to help them target customers. Apple could do this right off the bat for the card stored.

over 2 years ago

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