Shopper distrust following a series of retail data breaches is high—three in 10 shoppers say they don't trust retailers to protect personal and financial data against cyber criminals.
"Consumer distrust is exacerbated by the widely publicized retail data breaches over the past year," said Mike Braatz, senior VP, payments risk management solutions, ACI Worldwide.
A majority, 58 percent, have greater trust in financial institutions, government agencies and law enforcement, than retailers. And just 55 percent think retailers use security systems that adequately protected data, according to a new study by ACI Worldwide and Aite Group.
It's a sentiment backed up by research, as there are numerous reports that retailers too often are not PCI compliant, miss warning signs of breaches or use outdated systems.
Online shopping is actually more trusted than shopping in stores, according to the survey, and for good reason. It's a sentiment shared by blogger Brian Krebs, who broke the news of Target's massive breach last fall that compromised the personal and credit card information of more than 70 million shoppers. Krebs told National Public Radio's Terry Gross that most retailers, especially independent retailers and small chains, put a system in place and then neglect to update it as technology changes.
This puts shoppers in brick and mortar stores at far greater risk than those placing online orders. And while consumers may not have a deep understanding of just how data security works, they are correct in this case.
Lest anyone think prepaid cards are a safer option, countries where they are used the most, including India and China, report higher fraud rates at 17 percent to 18 percent.
When it comes to dealing with data breaches and other fraud issues, honesty really is the best policy: 77 percent of shoppers said they are "very interested" in being contacted about suspicious activity.
"Retailers have their work cut out for them—to change consumer perception that shopping, be it online or in-store, is unsafe," Braatz said.
-See this ACI Worldwide press release
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