PCI Pal has released the findings of a survey that uncovers Australians’ sentiment towards, and behaviours around data security and payments following the COVID-19 pandemic.
A significant 90 per cent of consumers admitted that their brand loyalty would come into question if their personal data is compromised as a result of poor data security practices, with 38 per cent of people confirming they would avoid purchasing from the firm for a couple of months, 25 per cent would avoid purchasing for several years, while 27 per cent said they would never return to the business in question.
Only 10 per cent of the 1,005 people interviewed said their customer loyalty would not be impacted.
When asked what it would take to persuade them to return to a brand following a breach, 43 per cent said they would need to see confirmation from a regulator or third party that their systems are safe.
With many firms switching to home or hybrid working since the pandemic, it is important for them to understand the impact this may have on consumer trust of payment processes. Seventy per cent of people interviewed cited concern about sharing their payment details with organisations whose staff are working remotely or from home. Of these, 43 per cent expressed slight concern, while more than a quarter (27 per cent) said they are extremely concerned.
The research, which has been published in a new report, This is Australia: The State of Security in the Eyes of Australian Consumers 2022, has found that although consumers are more wary, few automatically vet a company’s security practices before handing over their personal information. Just 27 per cent of consumers ask firms directly or do their own research into companies’ security practices. Just over half (51 per cent) of respondents said they don’t vet companies before giving them personal information, despite believing that they should, while 22 per cent of consumers simply trust that their data will be handled safely.
Even though thorough vetting may not be a regular practice of many consumers, there are certain red flags that can decrease trust and stop a buyer from proceeding with a purchase. Being asked to read payment card details out over the phone would lead to 35 per cent of consumers to request an alternative method, while almost a third (31 per cent) told researchers that they would be deterred from completing a transaction if the payment process felt “sketchy”.
Brand reputation plays an important part in consumer payment behaviour, with 46 per cent of respondents reporting that their level of comfort when reading their payment card details over the phone depends on the company they’re speaking to. Over a quarter (26 per cent) of respondents said that they refuse to pay over the telephone and will only complete transactions online, or in person.
Interestingly, since the pandemic, the industries that consumers trust the least in relation to their perceived data security practices has substantially changed. In 2019, retail was cited by 50 per cent of consumers as the riskiest sector in terms of data security, followed by travel (40 per cent) and the financial sector (36 per cent).
In 2022, this has switched, with finance perceived as the riskiest sector for personal data security, cited by 44 per cent of consumers, followed by government (39 per cent). Just over a quarter (26 per cent) of respondents mentioned lack of trust in the retail sector’s data handling practices.
The survey also revealed a greater number of consumers that trust local organisations with their personal information versus national firms. More than half (55 per cent) are inclined to trust local stores more, with 35 per cent specifically feeling that they “care more” about their reputation, while the other 20 per cent feel that hackers are less likely to target local organisations since they are too small.
Just over half of the respondents were speaking from direct experience with 51 per cent of people confirming that they have been the victim of a data hack or security breach. Of those, 14 per cent of people say they have stopped spending money with the brand responsible for the leak, 13 per cent have changed their passwords, and 5 per cent have switched banks or payment card provider.
According to Adam Paton, VP of sales, ANZ at PCI Pal, with only 8 per cent of consumers interviewed stating that they feel less concerned about how companies have been handling their personal data or data security since the pandemic, it’s clear there is some reticence and businesses need to work hard to demonstrate the steps they have in place to safeguard their customers’ personal information.
“In fact, 40 per cent of those we spoke to said that trust in a brand’s security does impact their spending with them, saying if they believe the brand to be responsible and secure, they will spend more with them.
“Based on the patterns we’re seeing among Australian consumers, it is evident that trust in a brand is exceptionally important,” Paton said.
PCI Pal has recently opened an office in Sydney, further expanding its successful array of trusted payment security solutions into Australia’s extensive pre-existing contact centre market. The company is further focused on helping Australian businesses safeguard customer trust by providing true cloud secure payment solutions.
“With all this in mind, Australian businesses must consider how best to maintain and grow trust among a cautious consumer base that is clearly looking for security assurances when making future purchases,” Paton concluded.