Every bit of it is true. I was employed in a key role at a company that was trying to do this before it was commercially viable to store and process all of this sort of data -- they went under. I've worked since on various projects that did not fail and both the CPU and storage requirements to do this sort of correlation analysis are a tiny fraction of the cost they were in the '90s.
The chip-card thing was a convenient (and necessary, sadly, due to the ease of ripping off a magstripe) foil to essentially force POS integration and thus Level 3 data collection upon virtually everyone in the retail space, although a fair number of mag-stripe reader systems were Level 3 integrated before the conversion started.
The reason the merchants go along with it is that they get a materially lower discount rate in exchange for doing so.
Any place that has the card terminal connected to the POS (and all "contactless" payment systems) must be assumed to be sending Level 3 data and the card network, the issuing bank and their affiliates all own that information. There are darn few stand-along "XON" style terminals still out there that provide only a total amount of the ticket with a time stamp and MCC (merchant category code) today.
If you think it's limited to there you're dead wrong as well. LexisNexis is thought of as a legal database research firm -- hahahaha, that's nowhere near
all what they do any more than Nielsen just does TV ratings.....
Then there's the fact that in a bankruptcy of a firm you did business with their data set is a marketable asset, will be sold, and whoever buys it can do whatever they want with it, with very, very few constraints.