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PayPal report cites security fears as annoyance in mobile payments

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July 8, 2014

0707paypal-small-opt_opt185Consumers continue to resist mobile payments as concerns over data security loom large in ecommerce transactions, according to a new global survey from digital-payments platform PayPal.

While 78 percent of respondents said paying online is easy, a full 42 percent said they do not use mobile devices for payment. The survey, which polled 15,105 adult banked consumers in 15 countries, also found that Americans felt much more secure about sharing financial data online than consumers in many other countries.

“The study shows that only 29% of the U.S. worries about sharing their data online, versus the global average of 59%, which shows how accustomed Americans have grown to the layers of security and the buyer protection companies like PayPal and others have built into the e-commerce experience, and how comfortable they feel as a result,” said Anuj Nayar, senior director of global initiatives at PayPal.

PayPal is a division of San Jose, CA-based online buying-and-selling platform eBay. The study was conducted in April and May by international research firm Reputation Leaders Ltd.

Fear of theft
Fears about payment details being stolen outpaced all other concerns in most countries, with 57 percent of respondents citing that as the most significant annoyance in online shopping. In the U.S., concern about theft of payment data was relatively low at 46 percent, compared with other countries.

Other concerns among the consumers surveyed globally included having to register on a Web site they never plan to use again, and finding added taxes or hidden charges at the last checkout screen. Thirty-eight percent of respondents cited those two annoyances. Shoppers also balk at having to enter payment-card details every time they shop (30 percent) and are annoyed by Web pages timing out before a transaction is finished (29 percent) and at having to remember passwords and PINs (26 percent).

0707PayPalScreenshot400 Asked which items consumers would never leave home without, 24 percent cited their mobile phones, compared with 21 percent who said they would not leave home with credit cards and 20 percent who said cash. The most popular bring-along was keys, with 34 percent citing those as the most essential thing to bring.

“This statistic in particular indicates to us that people want more from less,” said Mr. Nayar. “People are more empowered than ever before and having their say in ways they have never had before.”

Small businesses would benefit the most from mobile or online payments if the acceptance of such transactions were universal, the survey found. Fifty percent of respondents said they would spend more money at farmers markets and local shops if online or mobile payments were accepted by all businesses, and 18 percent said they would spend more at garage sales or other neighborhood sales.

Consumers said they feel that service workers like cab drivers and waiters and waitresses lose out the most when customers are not carrying cash, with 37 percent citing this group of people as the most impacted. Twenty-nine percent of respondents also said charities miss out on donations when consumers do not have cash on hand and the charity does not accept mobile payments.

The survey also addressed the use of cashless payments when traveling. Most respondents — 85 percent — said they would feel more secure if they could travel without cash, and 50 percent said they would be less concerned about potential theft or loss.

0707PayPal-MasterCard400The mobile-payment space has become increasingly competitive, with digital-wallet applications from Google and Apple gaining traction, as well as mobile-payment offerings from credit-card giants like MasterCard, Visa and American Express. Last year the three payment-card companies began working together on a new global standard for online and mobile payments (see story).

The new standard is intended to make online payment more secure and simplify the purchasing experience on smartphones and other devices.

Differences by region
The PayPal survey polled about 1,000 consumers in each of the 15 countries. It found some significant differences among the concerns over online payments from each of these countries.

For example, consumers in Turkey, Singapore, Japan and China were most concerned about their payment information being stolen, while shoppers in Germany, Australia Britain, the U.S. and Italy were the least concerned.

Interestingly, consumers in the U.S. spend the least amount of time shopping online — a mean of 78 minutes per week — compared with 387 minutes per week among Chinese consumers polled. China was also the only country where time spent shopping online outpaced time spent shopping offline.

0707PayPalScreenShot2Shoppers in the U.S. overall had fewer concerns about online shopping in general, however. For example, 22 percent of shoppers in the U.S. had concerns about receiving the wrong items, compared with 53 percent of shoppers in Singapore and 50 percent of shoppers in China.

In China, 90 percent of respondents have made payments from their phone, followed by Russia (85 percent), Brazil (nearly 70 percent) and Turkey (60 percent). Even in China, however, where mobile is mainstream, 35 percent of respondents wish paying by phone were easier.

“Countries vary dramatically in their mobile usage, because it’s a newer, emerging technology,” said Mr. Nayar. “PayPal believes that empowering people begins by knowing them, so having a clearer understanding of how and where mobile payment is already an accustomed payment method versus where it still feels new or less proven helps us best serve our customers – whether they are consumers, merchants or developers.”

Final Take

Mark Hamstra is content director at Mobile Commerce Daily, New York

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