Is there a legal framework to use third party data received in transaction data?

When it comes to using third-party data received in transaction data, there are legal frameworks in place to ensure the protection and appropriate use of that data. These frameworks vary depending on the jurisdiction and the nature of the data involved.

For instance, in the European Union, the General Data Protection Regulation (GDPR) sets out guidelines for the lawful processing of personal data, including transaction data. It emphasizes principles such as obtaining consent, limiting data collection to necessary information, and respecting the rights of data subjects.

In the context of open banking and payment services, the Payment Services Directive 2 (PSD2) in the EU regulates the sharing and access of transaction data with authorized third-party providers (TPPs). It mandates strong customer authentication and imposes obligations on TPPs to protect the data they access.

You can read more about silent party data here.