For the past year, select Google advertisers have had access to a potent new tool to track whether the ads they ran online led to a sale at a physical store in the U.S. That insight came thanks in part to a stockpile of Mastercard transactions that Google paid for. But most of the two billion Mastercard holders aren’t aware of this behind-the-scenes tracking. That’s because the companies never told the public about the arrangement.

Alphabet Inc.’s Google and Mastercard Inc. brokered a business partnership during about four years of negotiations, according to four people with knowledge of the deal, three of whom worked on it directly. The alliance gave Google an unprecedented asset for measuring retail spending, part of the search giant’s strategy to fortify its primary business against onslaughts from Amazon.com Inc. and others.

But the deal, which has not been previously reported, could raise broader privacy concerns about how much consumer data technology companies like Google quietly absorb.

Google paid Mastercard millions of dollars for the data, according to two people who worked on the deal, and the companies discussed sharing a portion of the ad revenue, according to one of the people. The people asked not to be identified discussing private matters. A spokeswoman for Google said there is no revenue sharing agreement with its partners.

A Google spokeswoman declined to comment on the partnership with Mastercard, but addressed the ads tool. "Before we launched this beta product last year, we built a new, double-blind encryption technology that prevents both Google and our partners from viewing our respective users’ personally identifiable information,” the company said in a statement. “We do not have access to any personal information from our partners’ credit and debit cards, nor do we share any personal information with our partners.” The company said people can opt out of ad tracking using Google’s “Web and App Activity” online console. Inside Google, multiple people raised objections that the service did not have a more obvious way for cardholders to opt out of the tracking, one of the people said.

Seth Eisen, a Mastercard spokesman, also declined to comment specifically on Google. But he said Mastercard shares transaction trends with merchants and their service providers to help them measure "the effectiveness of their advertising campaigns.” The information, which includes sales volumes and average size of the purchase, is shared only with permission of the merchants, Eisen added. "No individual transaction or personal data is provided," he said in a statement. "We do not provide insights that track, serve up ads to, or even measure ad effectiveness relating to, individual consumers."

Last year, when Google announced the service, called "Store Sales Measurement," the company just said it had access to "approximately 70 percent" of U.S. credit and debit cards through partners, without naming them.
Google has approached other payment companies about the program, according to two people familiar with the conversations, but it is not clear if they finalized similar deals. The people asked to not be identified because they were not authorized to speak about the matter. Google confirmed that the service only applies to people who are logged in to one of its accounts and have not opted out of ad tracking. Purchases made on Mastercard-branded cards accounted for around a quarter of U.S. volumes last year, according to the Nilson Report, a financial research firm.