The availability and convenience of electronic payments hinge on them being a secure method of exchanging money. For now, consumers are still willing to use these technologies, but retailers risk eroding trust in commercial institutions with their lack of security preparation.
Consumers expect the retail and payments industries to move forward together in developing safer, more secure technologies that will protect consumers from the intrusion and disturbance of fraud. Clearly, the data breaches of the past few years have made an impact on consumer attitudes, and they are becoming more vocal. Retailers must decide if they will heed this call and do the right thing by investing in the security we need today and the innovation of tomorrow.
In the last calendar year, there have been several high-profile data breaches at large retail stores. Much of the compromised data ends up on the dark web, where stolen financial information is bought, sold, and used, leaving consumers in dire straits.
It should then be no surprise new polling from Morning Consult shows consumers are increasingly paying attention to the issue of data security. This study confirms consumers are not blindly willing to trade their privacy for convenience, unaware of the implications. The insights overwhelmingly demonstrate consumers want their transactions to be fast and simple, but they also want them to be secure.
Trends have shifted rapidly in the last 10 years, but especially in the past few years. Cash transactions, while expensive to the merchant and still widely utilized, have made way for new technologies. Electronic payments are the preferred method for most people, whether they are swiping a card, tapping their phone to access their mobile wallet, or using a peer-to-peer mobile payment service like Venmo.
With data breaches occurring with alarming regularity, however, security topped the list of concerns among consumers surveyed. Further, security was the number one pick by far when consumers ranked what they put a premium on at the checkout. Speed, customer service, using their preferred payment method, and convenience all lagged behind.
Logically, these numbers revealed another consumer expectation: they want to see retailers step up when it comes to investing in new, secure payment technologies. The demand is growing for retailers to take on their fair share of providing secure payments for their customers, with 64% of consumers believing retailers bear financial responsibility for securing data.
At the very least, consumers want to see stores equipped with EMV technology, an innovation some in the retail sector have been slow to implement. Over a third of those polled said they would be uncomfortable making a purchase at a retailer who was not EMV-equipped.
Not only must retailers commit to protecting consumer data now, they must prepare for the future. Enormous strides have been made for securing payments in the last several years, but the rest of the electronic payments ecosystem must support and adopt new technologies.
Tokenization, fingerprint and face identification, and encryption are all methods consumers would like to see utilized more to protect their privacy. For example, more than 1 in 3 say fingerprint identification is the most secure payment option and over 70% believe it is likely new technologies will eventually replace the current ones in the coming years. This means retailers must resist the urge to hold onto outdated technologies like PIN and start thinking in terms of 21st century advancements.