Privacy-Preserving Payment Architectures

Abstract

As digital payments become increasingly ubiquitous, concerns over data privacy and transaction security have intensified, prompting the need for privacy-preserving payment architectures. This study explores the design, implementation, and evaluation of payment systems that ensure confidentiality, integrity, and anonymity without compromising transactional efficiency or regulatory compliance. It examines key technologies such as homomorphic encryption, secure multiparty computation, zero-knowledge proofs, and blockchain-based mechanisms that enable secure payment verification and data sharing with minimal exposure of sensitive user information. Furthermore, it highlights privacy-enhancing frameworks integrated into mobile wallets, digital identity systems, and decentralized finance (DeFi) platforms. Through comparative analysis of centralized and decentralized payment models, the paper identifies trade-offs between scalability, transparency, and privacy assurance. The findings underscore that hybrid architectures—combining cryptographic privacy layers with compliance-enabling audit trails—represent the most viable approach for future financial ecosystems. Ultimately, privacy-preserving payment architectures not only safeguard user trust but also support regulatory adaptability and sustainable innovation in the evolving landscape of digital finance.