Despite Widespread Online Spending Intentions for Cyber Monday, Study Reveals 79% of Consumers Have Concerns About Online Fraud
Posted September 14, 2011
The Joint Study by ThreatMetrix and The Ponemon Institute Also Reveals One-Third of Consumers Say Their Online Purchases Will Exceed In-Store Shopping This Year
LOS ALTOS, CA – September 15, 2011 – ThreatMetrix™, the fastest growing provider of cloud-based fraud prevention solutions that do not require personally identifiable information (PII), today announced results of a joint study with The Ponemon Institute, “Mobile Payments & Online Shopping Survey of U.S. Consumers.” The survey, which looked at U.S. consumers who self-reported that they are active users of the Internet, revealed that one-third of consumers intend to purchase more online than in-store this holiday shopping season.
Despite widespread online spending intentions for Cyber Monday and the upcoming holidays, three in four consumers have either some concerns (53%) or serious concerns (26%) about online fraud. Forty-three percent report they have indeed been the victim of online fraud, up slightly from 42% that was reported in a similar study in early 2011.
“While consumers continue to show a preference for the convenience of shopping and browsing online, their concerns about becoming a victim of online fraud is also growing,” said Bert Rankin, vice president of marketing, ThreatMetrix. “With mobile thrown into the shopping mix, which is even more apparent this year, consumers and retailers alike need to be well equipped against fraudsters in every possible channel.”
Surprisingly, nearly one in three consumers believe the fraud risk to be lower on a smartphone or tablet than on a desktop or laptop computer, added Rankin. When asking the “Elite” group – which for the purpose of the survey are consumers who could be considered extremely active users of the Internet – that number increased to 39%. According to Dr. Larry Ponemon, chairman and founder of The Ponemon Institute, those in the Elite category often have different perceptions of online shopping and online fraud than those who are less frequent users.
“Consumers who have a high propensity to use the Internet for shopping, banking, gaming, social media interactions, and other activities, appear to have a stronger sense of security online — which is not exclusive only to desktops and laptops,” said Ponemon. “While these users may be savvier when it comes to the digital channel, their safety net may not always be there. Online transactions are a two-way street. While they may think they’re taking the necessary precautions to avoid online fraud, the sites they’re visiting must also be implementing online fraud prevention tactics.”
According to Julie Conroy McNelley, senior fraud and risk analyst at the Aite Group, malware is a big business that’s growing rapidly, and actively targeting the financial value chain.
“Mobile, in particular, is difficult to protect from fraud,” said McNelley. “With around 4,000 different device types to secure, it’s often a daunting task. On top of that, few consumers are using anti-virus or anti-spyware software on their mobile devices. Mobile, just like more traditional e-commerce transactions from a desktop, has the potential to become a hotbed for fraud.”
An overwhelming 84% of survey respondents said they thought it was important that a retailer express a commitment to protecting them from fraud.
Consumer Purchasing Behavior by Channel
In regards to their device of choice 49% indicated they will use their desktop or laptop computer on Cyber Monday and for other holiday-related purchases, 37% will use a smartphone, and 12% will use a tablet device. In fact, one in four respondents have already used their smartphone or tablet to make a mobile payment of some kind, with the majority using either PayPal or credit cards for the transaction.
In fact, the Elites indicated a preference toward smartphones (49%) and tablets (17%) on Cyber Monday and the upcoming holiday season, with only 34% saying they will be using their desktop or laptop. Furthermore, 40% of the Elites said their online purchases will likely exceed in-store purchases.
So what are consumers buying from their mobile devices these days? Most popular purchases using a mobile payments option on a smartphone or tablet are music downloads (77%), online service subscriptions or memberships (75%) and apps for smartphone or tablets (73%), according to survey results. Consumer electronics ranked slightly above clothing, at 48% and 43%, respectively.
For a free Executive Research Summary of the “Mobile Payments & Online Shopping Survey of U.S. Consumers” download it here.”
The Ponemon Institute© is dedicated to advancing responsible information and privacy management practices in business and government. To achieve this objective, the Institute conducts independent research, educates leaders from the private and public sectors and verifies the privacy and data protection practices of organizations in a variety of industries. For more information, visit www.ponemon.org.
ThreatMetrix®, The Digital Identity Company®, is the market-leading cloud solution for authenticating digital personas and transactions on the Internet. Verifying more than 20 billion annual transactions supporting 30,000 websites and 4,000 customers globally through the ThreatMetrix Digital Identity Network®, ThreatMetrix secures businesses and end users against account takeover, payment fraud and fraudulent account registrations resulting from malware and data breaches. Key benefits include an improved customer experience, reduced friction, revenue gain and lower fraud and operational costs. The ThreatMetrix solution is deployed across a variety of industries, including financial services, e-commerce, payments and lending, media, government and insurance.