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The Privacy Paradox Guarding Data Security To Build Customer Engagement

AUGUST 2021

The Privacy Paradox: Securing Data To Build Customer Engagement, a PYMNTS and Very Good Security collaboration, examines the role of personally identifiable information (PII) protections in customer engagement and offers insights into how companies can better address consumers’ concerns around data privacy. The report is based on a survey of 2,257 U.S. consumers.

THE PRIVACY PARADOX

Securing Data To Build Customer Engagement

The Privacy Paradox Guarding Data Security To Build Customer Engagement

Table of

Contents Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 01 Key findings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 03 Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23

THE PRIVACY PARADOX Securing Data To Build Customer Engagement

The Privacy Paradox: Securing Data To Build Customer Engagement was done in collaboration with Very Good Security, and PYMNTS is grateful for the company’s support and insight. PYMNTS.com retains full editorial control over the following findings, methodology and data analysis.

The Privacy Paradox: Securing Data To Build Customer Engagement

Introduction

thinking about the security of their data

interactions that protect their data, but

whenever they interact with their financial

they also want customized, frictionless

institutions, and 57 percent have begun

checkout experiences, which are often

thinking about it more since the health

crisis began.4

increased their investments in data secu-

Consumers’

overwhelming

interest

keeping their personal information secure wherever they might encounter a risk of

data compromise has real-world ram-

solution that protects customer data and assures consumers that their details are safe.

The FBI reported a 400 percent increase

ifications for retailers. Another recent

In The Privacy Paradox: Securing Data To

more of their lives digitally in

in cyberattacks on personal data in 2020

survey revealed that 87 percent of con-

Build Customer Engagement, a collabo-

2020 due to the health cri-

as consumers brought their shopping and

sumers would refuse to do business with

ration with Very Good Security, PYMNTS

sis, and though aspects of

banking activities online.2 The challenge of

a company if they had doubts about the

examines the results of a survey of 2,257

the country are reopening, consumers

secure data management gained promi-

way the company might handle their

United States consumers to reveal the

remain more active online than ever.

nence as consumers have learned more

data.5 PYMNTS’ researchers found that

role of personally identifiable information

The overwhelming majority — 85 per-

about how their data might be mishan-

85 percent of consumers used merchant

(PII) protections in customer engagement.

cent — of those who transferred the

dled or stolen by bad actors.

trustworthiness in managing their data

This report provides insights into steps

and protecting them from fraud as a key

that companies can take to address con-

determinant of where they will shop.6

sumers’ concerns about data privacy.

tal channels plan to keep performing at least one digitally “shifted” task, even when restrictions on retail locations end.1 Merchants will have to manage online personal data securely for the foreseeable future — and at a historic scale.

Consumers also consider data security when they are asked to surrender sensitive information in person — even by their

The paradox facing merchants is signif-

banks, which consumers tend to view as

icant: Consumers want highly secure

more trustworthy than retailers, according to research.3 A recent survey revealed that 64 percent of consumers are always

Inside The Mind Of The Digital-First Consumer. PYMNTS.com. 2021. https://www.pymnts.com/digital-payments/2021/inside-the-mind-of-the-digital-first-consumer/. Accessed July 2021.

Miller, M. FBI sees spike in cyber crime reports during coronavirus pandemic. The Hill. 2020. https://thehill.com/policy/cybersecurity/493198-fbi-sees-spike-in-cyber-crime-reports-during-coronavirus-pandemic. Accessed July 2021.

Bruce, G. Global data: Which sectors do consumers trust most with their personal data? YouGov. 2021. https://today.yougov.com/topics/technology/articles-reports/2021/04/23/ global-data-which-sectors-do-consumers-trust-most-. Accessed July 2021.

rity by 68 percent in 2020, must find a

onsumers began conducting

bulk of their shopping activities to digi-

Cercelle, T; Sohail, O. Redesigning customer privacy programs to enable value exchange. Deloitte Insights. 2020. https://www2.deloitte.com/content/dam/insights/us/articles/5214_ CFS-Privacy/5214_CFS_Privacy_v5.pdf. Accessed July 2021. Anant, V; Donchak, L; Kaplan, J; Soller, H. The consumer-data opportunity and the privacy imperative. McKinsey & Company. 2020. https://www.mckinsey.com/business-functions/ risk/our-insights/the-consumer-data-opportunity-and-the-privacy-imperative. Accessed July 2021. NEW REPORT: How Voice Assistants Help Win Consumer Spend — And Their Trust. PYMNTS.com. 2020. https://www.pymnts.com/news/merchant-innovation/2020/consumer-trust-loyalty-voice-assistant-ecommerce-amazon-pay/. Accessed July 2021.

The Privacy Paradox: Securing Data To Build Customer Engagement

Popular but not universal: Less than half of consumers currently store payment credentials in their online accounts.

Key findings

A: Share of consumers who store payment credentials

on select platforms

Average (N = 7,949) 47.8%

69.3%

0000000000

Online banking apps (N = 1243) 63.3%

0000000000

42.6% 69.7% 69.0% 69.7% 68.5%

0000000000

Retail delivery (N = 433)

53.6%

erations — including Generation Z, millennials and bridge millennials of all survey respondents reported storing their payment credentials

network marketplace users said they store payment credentials. Bridge millennial, millennial and Gen Z consumers were the most likely generations of all to

0000000000

53.3% 60.3% 67.5% 67.9% 68.1%

Online marketplaces (N = 821) 45.2%

0000000000

Telemedicine (N = 367) 29.8%

in online accounts. Rates were higher for cryptocurrency exchange users (69 percent) and online brokerage users (64 percent), but only 23 percent of social

48.6% 65.3% 69.5% 70.4% 76.0%

0000000000

Restaurant delivery aggregators (N = 771) 53.2%

0000000000

36.4% 49.3% 62.2% 60.5% 60.2%

Healthcare (N = 823) 27.5%

0000000000

Social network marketplaces (N = 1,330) 22.6%

0000000000

Source: PYMNTS.com

store payment credentials online. PYMNTS discovered that 55 percent of consumers who do not store payment credentials online cite concerns about their of consumers showed concern with merchant-operated platforms (65 percent),

8.3% 35.9% 40.3% 36.7% 48.4%

social network marketplaces (61 percent) and online banking apps (59 percent).

Securing Data To Build Customer Engagement

35.9% 50.0% 54.9% 56.1% 67.6% 31.9% 44.3% 55.0% 53.4% 52.3%

payment data being stolen as their reason for not doing so. The largest portions

THE PRIVACY PARADOX

select platforms, by generation

58.6% 76.8% 69.3% 68.1% 67.3%

Online brokerage accounts (N = 425) 63.9%

B: Share of consumers who store payment credentials on

33.3% 49.2% 54.2% 54.6% 56.6%

0000000000

Cryptocurrency exchanges (N = 354)

61.1%

— are the most likely to store payment credentials. Only 48 percent

FIGURE 1: Consumers’ storage of payment credentials on select platforms

Merchant-operated platforms (N = 1,382)

YMNTS’ research found that consumer respondents from younger gen-

Baby boomers and seniors Generation X Bridge millennials Millennials Generation Z

17.2% 30.7% 29.5% 36.2% 31.7% 8.3% 27.5% 28.2% 28.3% 28.4%

Average (N = 7,949) 0000000000 0000000000 0000000000 0000000000 0000000000

Cryptocurrency exchanges (N = 354) 0000000000 0 0 0 0 0 0 0 0 0 0 0000000000 0000000000 0000000000

Online brokerage accounts (N = 425) 0000000000 0000000000 0000000000 0000000000 0000000000

Online banking apps (N = 1,243) 0000000000 0000000000 0000000000 0000000000 0 0 0 0 0 0 0 0 0 0

Merchant-operated platforms (N = 1,382) 0000000000 0000000000 0000000000 0000000000 0000000000

Retail delivery (N = 433) 0000000000 0000000000 0000000000 0000000000 0000000000

Restaurant delivery aggregators (N = 771) 0000000000 0000000000 0000000000 0000000000 0000000000

Online marketplaces (N = 821) 0000000000 0000000000 0000000000 0000000000 0000000000

Telemedicine (N = 367) 0000000000 0000000000 0000000000 0000000000 0000000000

Healthcare (N = 823) 0000000000 0000000000 0000000000 0000000000 0000000000

Social network marketplaces (N = 1,330) 0000000000 0000000000 0000000000 0000000000 0000000000

Source: PYMNTS.com

The Privacy Paradox: Securing Data To Build Customer Engagement

Key findings

TABLE 1:

Why consumers do not store payment credentials on select platforms Share of consumers who do not store payment credentials expressing select reasons for not doing so, by type of platform

Worries about payment data being stolen

Worries about losing money

The platform does not allow me to store payment credentials.

Payment credentials must be reentered when transactions occur, anyway.

Do not use often enough or there is no need to

The platform makes it too difficult to store payment credentials.

It is not convenient.

Other

• Average

54.6%

11.0%

10.7%

9.2%

7.0%

3.8%

1.3%

2.5%

• Merchant-operated platforms

64.6%

11.1%

5.0%

8.9%

2.5%

3.4%

1.2%

3.3%

• Social network marketplaces

61.0%

10.3%

8.5%

5.3%

8.8%

3.3%

1.4%

1.2%

• Online banking apps

58.8%

10.4%

8.3%

10.3%

3.5%

1.0%

4.2%

• Online marketplaces

58.8%

12.1%

3.5%

12.8%

6.3%

3.6%

1.9%

1.1%

• Restaurant delivery aggregators

54.9%

14.9%

5.8%

11.4%

4.7%

5.1%

1.1%

2.2%

• Online brokerage accounts

48.8%

14.5%

7.7%

11.7%

4.0%

8.1%

1.1%

4.2%

• Retail delivery

48.4%

16.5%

5.5%

11.0%

10.2%

3.5%

1.7%

3.3%

• Healthcare

41.0%

7.3%

24.7%

9.8%

11.2%

2.5%

0.9%

2.5%

• Cryptocurrency exchanges

39.2%

15.6%

15.4%

10.2%

5.7%

8.0%

0.5%

5.4%

• Telemedicine

38.2%

7.1%

26.0%

8.8%

10.0%

5.5%

1.3%

3.3%

(N = 4,174)

(N = 548)

(N = 1,033)

(N = 460)

(N = 450)

(N = 360)

(N = 154)

(N = 201)

(N = 596)

(N = 113)

(N = 259)

Source: PYMNTS

The Privacy Paradox: Securing Data To Build Customer Engagement

Key findings

Meet the super engagers: affluent, millennial, data security–savvy and deeply connected to their favorite platforms.

A: Average number of times per month users engage with

online platforms

Average (N = 7,949) 12.1

0000000000

Social network marketplaces (N = 1,330) 23.4

0 0 0 0 0 0 0 0 0 0

Cryptocurrency exchanges (N = 354) 18.8

0 0 0 0 0 0 0 0 0 0

Online brokerage accounts (N = 425) 15.9

14.9

0000000000

9.5

times

per

month

with

online

0000000000

platforms on average, and millennials and bridge millennials are the most engaged demographic groups. They engage 14 and 13 times per month on average, respectively, whereas baby boomers and seniors

0000000000

Restaurant delivery aggregators (N = 771) 6.6

only average 10 times per month.

0000000000

Customer engagement on social network marketplaces almost doubles those rates, with users generally engaging 23 times per month. Engagement on cryptocurrency exchange platforms is 1.5 times the average, at 19 times per month.

0000000000

Healthcare (N = 823) 3.8

22.7 23.3 23.6 24.5 22.2

6.8 10.1 11.4 11.8 10.3

Telemedicine (N = 367) 4.3

9.5 12.2 13.2 13.8 12.4

11.8 15.4 17.5 17.6 14.5

Retail delivery (N = 433) 6.8

online platforms, by generation

11.5 17.2 16.7 16.8 17.6

0000000000

Online marketplaces (N = 821) 8.0

B: Average number of times per month users engage with

19.4 18.1 19.4 19.1 18.9

Merchant-operated platforms (N = 1,382)

engage

FIGURE 2: Average number of times per month users engage with select online platforms

Online banking apps (N = 1,243)

onsumers

0000000000

Source: PYMNTS.com

6.1 8.2 8.9 9.2 8.6 3.4 7.0 7.0 7.7 7.3 3.5 5.7 7.2 8.4 7.0

THE PRIVACY PARADOX Securing Data To Build Customer Engagement

Baby boomers and seniors Generation X Bridge millennials Millennials Generation Z

1.3 4.2 4.4 5.5 8.5 2.1 4.0 3.7 5.7 4.4

Average (N = 7,949) 0000000000 0000000000 0000000000 0000000000 0000000000

Social network marketplaces (N = 1,330) 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0000000000

Cryptocurrency exchanges (N = 354) 0000000000 0000000000 0000000000 0000000000 0000000000

Online brokerage accounts (N = 425) 0000000000 0000000000 0000000000 0000000000 0000000000

Online banking apps (N = 1,243) 0000000000 0000000000 0000000000 0000000000 0000000000

Merchant-operated platforms (N = 1,382) 0000000000 0000000000 0000000000 0000000000 0000000000

Online marketplaces (N = 821) 0000000000 0000000000 0000000000 0000000000 0000000000

Retail delivery (N = 433) 0000000000 0000000000 0000000000 0000000000 0000000000

Restaurant delivery aggregators (N = 771) 0000000000 0000000000 0000000000 0000000000 0000000000

Telemedicine (N = 367) 0000000000 0000000000 0000000000 0000000000 0000000000

Healthcare (N = 823) 0000000000 0000000000 0000000000 0000000000 0000000000

Source: PYMNTS.com

The Privacy Paradox: Securing Data To Build Customer Engagement

FIGURE 3:

Engagement with online platforms Share of consumers who have engaged with select online platforms over the last 12 months, by annual income Merchant-operated platforms 68.3% 62.8% 50.9%

0000000000 0000000000 0000000000

Online brokerage accounts 27.3% 19.6% 9.8%

Social network marketplaces 64.2% 60.5% 51.6%

0000000000 0000000000 0000000000

Restaurant delivery aggregators 38.5% 36.1% 27.0%

0000000000

0000000000 0000000000 0000000000

Cryptocurrency exchanges 20.4% 18.1% 8.5%

Healthcare 47.2% 35.0% 26.1%

0000000000

Telemedicine 20.1% 13.2% 13.5%

Online marketplaces 47.0% 37.1% 25.2%

0000000000

Retail delivery 22.3% 20.1% 13.1%

Online banking apps 67.5% 56.0% 39.9%

0000000000

0000000000 0000000000 0000000000

I have not used any of these platforms 5.6% 9.2% 18.6%

0000000000 0000000000 0000000000

Source: PYMNTS

More than $100K

0000000000

$50K - $100K

0000000000

Less than $50K

Consumers with higher incomes are more likely to engage with online platforms. Survey respondents earning more than $100,000 per year showed the highest levels of engagement with merchant-operated platforms.

The Privacy Paradox: Securing Data To Build Customer Engagement

The new fear factor: Consumers used platforms that store PII more, and concerns about data security rose in tandem.

Key findings

Change in frequency of consumer engagement with select online platforms Share of consumers who have increased or decreased their frequency of engagement with select online platforms over the last 12 months Average (N = 7,949) 48.1% 46.8% 5.1%

0000000000 0000000000 0000000000

Restaurant delivery aggregators (N = 771) 58.7% 33.5% 7.8%

Merchant-operated platforms (N = 1,382) 0000000000 0000000000 0000000000

cent), telemedicine services (60 percent), retail delivery (60 percent), restaurant delivery aggregators (59) and online brokerage accounts (55

percent). Consumers’ concerns over sharing their PII often relate to specific fears about data misuse, and there are generational differences as to why consumers

44.8% 48.4% 6.8%

“somewhat” concerned about providing PII to access online accounts and 49 per-

0000000000 0000000000

0000000000 0000000000 0000000000

Healthcare (N = 823) 41.4% 53.8% 4.8%

0000000000

0000000000 0000000000 0000000000

Telemedicine (N = 367) 60.5% 34.8% 4.8%

Online marketplaces (N = 821) 40.0% 53.5% 6.5%

0000000000

Retail delivery (N = 433) 59.8% 33.8% 6.4%

Online banking apps (N = 1,243) 37.5% 59.9% 2.6%

are worried about data handling. Our researchers found that nearly all consumers exhibit some concern about the security of their PII online, with 81 percent at least

0000000000

Online brokerage accounts (N = 425) 55.1% 41.8% 3.1%

Social network marketplaces (N = 1,330)

their use of platforms that manage cryptocurrency transactions (71 per-

FIGURE 4:

48.9% 47.1% 4.0%

ver the past 12 months, large shares of consumer respondents increased

0000000000 0000000000 0000000000

Cryptocurrency exchanges (N = 354) 71.4% 24.8% 3.8%

0000000000 0000000000 0000000000

Source: PYMNTS

Increased

0000000000

About the same

0000000000

Decreased

cent “very” or “extremely” concerned.

THE PRIVACY PARADOX Securing Data To Build Customer Engagement

The Privacy Paradox: Securing Data To Build Customer Engagement

FIGURE 5: Consumers’ concern about providing PII to access online platform accounts

FIGURE 6: Reasons for concern about providing PII

A: Share of consumers expressing different concern levels

A: Share of consumers who are concerned about providing PII

Extremely concerned 25.8%

0000000000

Somewhat concerned 32.4%

0000000000

Not at all concerned 6.2%

by generation

22.3% 22.9% 24.1% 22.8% 23.1%

0000000000

Slightly concerned 12.8%

B: Share of consumers expressing different concern levels,

33.8% 26.0% 20.6% 20.5% 13.8%

0000000000

Very concerned 22.7%

Key findings

0000000000

Source: PYMNTS.com

29.2% 33.3% 28.5% 32.9% 39.7% 8.6% 12.7% 17.8% 16.6% 16.6% 6.0% 5.1% 9.0% 7.2% 6.9%

to access online platforms expressing select reasons for concern

Extremely concerned

B: Share of consumers who are concerned about providing PII

to access online platforms expressing select reasons for concern, by generation

0000000000 0000000000

I am afraid someone will gain access to information in my accounts.

0000000000

27.4%

0000000000

I am afraid someone else will access my accounts.

Very concerned

18.0%

0000000000 0000000000

0000000000

I do not want my information tracked online.

0000000000

13.5%

0000000000 0000000000

21.4% 17.5% 16.0% 15.7% 14.8%

0000000000

I am afraid someone will steal my money.

Somewhat concerned

12.4%

0000000000 0000000000

0000000000

I do not want someone to open new accounts in my name.

0000000000 0000000000

11.3%

0000000000

I am afraid the platform might sell my information to third parties.

Slightly concerned

10.6%

0000000000 0000000000

0000000000

There are too many online sites with my PII.

0000000000 0000000000

5.3%

0000000000

1.4%

0000000000

13.8% 12.9% 10.8% 11.8% 18.7% 10.0% 13.1% 11.4% 14.1% 14.2%

0000000000

Other

Not at all concerned

31.5% 25.9% 26.5% 25.6% 22.7%

00000

0000000000 0000000000

Source: PYMNTS.com

0000000000 0000000000

Baby boomers and seniors

Source: PYMNTS.com

11.1% 11.8% 12.4% 11.5% 10.5%

Generation X Bridge millennials Millennials Generation Z

8.2% 11.2% 13.9% 12.7% 12.1% 2.5% 6.4% 7.6% 7.7% 5.1%

Consumer concerns about PII are often focused on platform breaches that can lead to data theft or unauthorized data access by criminals or other parties. Our data revealed the extent of Americans’ fears over data theft: an aggregated 45 percent of consumers said they are afraid to share their PII either because they are worried about someone accessing their accounts (18 percent) or the personal information stored in them (27 percent). We found

1.5% 1.3% 1.5% 1.0% 1.9%

I am afraid someone will gain access to information in my accounts. 0000000000 0000000000 0000000000 0000000000 0000000000

I am afraid someone else will access my accounts. 0000000000 0000000000 0000000000 0000000000 0000000000

I do not want my information tracked online. 0000000000 0000000000 0000000000 0000000000 0000000000

I am afraid someone will steal my money. 0000000000 0000000000 0000000000 0000000000 0000000000

I do not want someone to open new accounts in my name. 0000000000 0000000000 0000000000 0000000000 0000000000

I am afraid the platform might sell my information to third parties. 0000000000 0000000000 0000000000 0000000000 0000000000

There are too many online sites with my PII. 0000000000 0000000000 0000000000 0000000000 0000000000

Other 0000000000 00000 0000000000 00000 0000000000

Baby boomers and seniors

Source: PYMNTS.com

Generation X

that 55 percent of consumers who do not store payment credentials with a merchant are

Bridge millennials

worried about their payment data being stolen.

Generation Z

Millennials

The Privacy Paradox: Securing Data To Build Customer Engagement

Key findings

FIGURE 7: How concern about a platform

not protecting or sharing PII can trigger abandonment

From worry to walkout: Concerns over PII lead to merchant or platform abandonment.

A: Likelihood of switching online platforms if there is a

security concern

Very or extremely likely 56.6%

0000000000

Slightly or not at all likely 16.2%

concern, by generation

62.1% 59.5% 54.6% 51.4% 45.8%

0000000000

Somewhat likely 27.2%

B: Likelihood of switching online platforms if there is a security

0000000000

Source: PYMNTS.com

22.6% 25.1% 29.5% 31.3% 35.5% 15.3% 15.3% 16.0% 17.3% 18.7%

Very or extremely likely 0000000000 0000000000 0000000000 0000000000 0000000000

Somewhat likely 0000000000 0000000000 0000000000 0000000000 0000000000

Slightly or not at all likely 0000000000 0000000000 0000000000 0000000000 0000000000

Source: PYMNTS.com

Baby boomers and seniors Generation X

ur researchers found that data protection is a key factor affecting cus-

Bridge millennials

tomer engagement with a merchant or platform. PYMNTS’ data shows

Generation Z

Millennials

that 57 percent of consumers would be highly likely to switch to another online platform if they became concerned about a provider sharing or

not protecting their PII. This share increased to 62 percent among baby boomers

FIGURE 8: How concern about a platform not protecting or sharing PII can trigger abandonment

and seniors. Crucially, 65 percent of consumers were very likely to abandon a cart

A: Likelihood of abandoning account setup or transaction if

there is a security concern

or stop an account sign-up process if they felt concern about the security of their personal information.

Very or extremely likely 65.2%

0000000000

Slightly or not at all likely 13.6%

there is a security concern, by generation

74.2% 66.4% 58.7% 58.0% 52.7%

0000000000

Somewhat likely 21.2%

B: Likelihood of abandoning account setup or transaction if

0000000000

Source: PYMNTS.com

14.1% 19.5% 26.0% 26.7% 33.6% 11.8% 14.2% 15.3% 15.3% 13.7%

THE PRIVACY PARADOX Securing Data To Build Customer Engagement

Very or extremely likely 0000000000 0000000000 0000000000 0000000000 0000000000

Somewhat likely 0000000000 0000000000 0000000000 0000000000 0000000000

Slightly or not at all likely 0000000000 0000000000 0000000000 0000000000 0000000000

Baby boomers and seniors

Source: PYMNTS.com

Generation X Bridge millennials Millennials Generation Z

The Privacy Paradox: Securing Data To Build Customer Engagement

Key findings

The new “data minders” FIGURE 9: Evolution of concerns amongst consumers A: Change in the level of concern

B: Change in the level of concern, by generation

Higher or significantly higher concern 39.6%

44.9% 41.4% 37.3% 34.2% 32.2%

0000000000

About the same concern 49.4%

0000000000

Lower or significantly lower concern 11.0%

0000000000

Source: PYMNTS.com

he security of PII matters to 94 percent of consumers, and four out of 10 are now more worried about the data security practices of merchants than they were a year ago. Some of these consumers’ fears are specific, such as the concern that someone might gain access to

50.4% 48.1% 47.1% 48.0% 53.3% 4.7% 10.5% 15.7% 17.9% 14.5%

Higher or significantly higher concern 0000000000 0000000000 0000000000 0000000000 0000000000

About the same concern 0000000000 0000000000 0000000000 0000000000 0000000000

Lower or significantly lower concern 0000000000 0000000000 0000000000 0000000000 0000000000

Baby boomers and seniors

Source: PYMNTS.com

Generation X

their data and open new accounts in their names (held by 11 percent) or steal

Bridge millennials

their money (12 percent). Other fears are more general, like the concern that

Generation Z

Millennials

bad actors will use consumer data in some indeterminate, harmful way (held by 27 percent). Only 11 percent of consumers feel more confident that their data is safe than they did a year ago. The new “data minders” are motivated in their choice of merchant or platform by their sense of security about the way their personal details, including their payment credentials, are protected. Baby boomers and seniors are the most concerned about their data being accessed without their authorization (a 32 percent share held this worry), and Generation Z consumers are worried in the greatest shares about their information being tracked online (19 percent).

THE PRIVACY PARADOX Securing Data To Build Customer Engagement

The Privacy Paradox: Securing Data To Build Customer Engagement

An honest (inter)face: Consumers tend to trust online retailers that they know well with their personal data.

Key findings

A: Level of consumer willingness to provide PII to select

online platforms

Those currently in use 20.1% 36.4% 43.5%

0000000000 0000000000

Those used at least once per week

16.5% 30.5% 53.0%

0000000000

are the most likely to store their personal data with a platform. Familiarity inspires trust online. Fifty-six percent of consumers

are at least “somewhat” willing to provide PII to online platforms they currently

provide PII to select online platforms, by generation

12.3% 25.2% 28.4% 29.4% 24.5%

0000000000 0000000000

Those currently in use 0000000000 0000000000 0000000000 0000000000 0000000000

Those used at least once per week 0000000000 0000000000 0000000000 0000000000 0000000000

0000000000 0000000000

8.2% 18.3% 24.9% 24.7% 17.6%

0000000000

Those that have not been used before 11.7% 17.9% 70.3%

B: Share of consumers who are “very” or “extremely” willing to

10.3% 22.2% 26.9% 28.2% 24.9%

0000000000

Those used at least once per month

forms that they patronize frequently, and younger consumers

FIGURE 10: Consumers’ inclination to provide PII to select online platforms

21.8% 31.5% 46.7%

ost consumers are willing to share their data with digital plat-

0000000000

Those used at least once per month 0000000000 0000000000 0000000000 0000000000 0000000000

0000000000 0000000000

Source: PYMNTS

Very or extremely willing Somewhat willing

3.5% 13.2% 17.5% 19.7% 13.9%

Those that have not been used before 0000000000 0000000000 0000000000 0000000000 0000000000

Slightly or not at all willing Baby boomers and seniors

Source: PYMNTS.com

Generation X

use, and 20 percent are “very” or “extremely” willing to do so.

Bridge millennials Millennials Generation Z

PYMNTS’ researchers learned that platforms may exude trustworthiness by actively promoting their commitment to data security. Our data revealed that 62 percent of consumers are at least “somewhat” likely to provide PII if online platforms assure them that their data will be protected and not shared. Twenty-four percent are “very” or “extremely” likely to provide this data in this instance, and that share rises to 30 percent for Gen X and millennial consumers and 31 percent for bridge millennials. Online platforms’ assurances that

THE PRIVACY PARADOX Guarding Data Security To Build Customer Engagement

their data is protected and not shared with third parties are “very” or “extremely” important for nearly three-quarters of consumers. These statements are important to baby boomers and seniors (83 percent agreed with this sentiment) and they also hold sway with more than half of Gen Z consumers (54 percent).

The Privacy Paradox: Securing Data To Build Customer Engagement

FIGURE 11: Assurances’ impact on consumers’ comfort providing PII A: Consumers’ likelihood of providing PII if an online platform

provides assurances that data will be protected and not shared with third parties

Very or extremely likely 24.0%

0000000000

Slightly or not at all likely 37.6%

provides assurances that data will be protected and not shared with third parties, by generation

14.2% 30.3% 30.9% 30.3% 24.0%

0000000000

Somewhat likely 38.4%

B: Consumers’ likelihood of providing PII if an online platform

0000000000

Source: PYMNTS.com

34.2% 35.8% 42.3% 39.7% 54.1% 51.6% 33.9% 26.8% 30.1% 22.0%

Very or extremely likely 0000000000 0000000000 0000000000 0000000000 0000000000

Somewhat likely 0000000000 0000000000 0000000000 0000000000 0000000000

Slightly or not at all likely 0000000000 0000000000 0000000000 0000000000 0000000000

Baby boomers and seniors

Source: PYMNTS.com

Generation X Bridge millennials Millennials Generation Z

The Privacy Paradox: Securing Data To Build Customer Engagement

Conclusion

Methodology

s consumers interact with digital channels with greater frequency, their

The Privacy Paradox: Securing Data To Build Customer Engagement

exposure to new types of digital risk may increase alongside their concern

is based on a census-balanced survey of 2,257 U.S. consumers con-

over their data’s safety. Merchants receiving a flood of new online con-

ducted from May 7 to May 13, 2021. The survey consisted of 13 questions

sumers and increasingly complex cybersecurity risks must be mindful of

concerning consumers’ online shopping behaviors and their attitudes

the importance of strong security on the back ends of their eCommerce operations,

toward privacy, data security and related matters.

apps and other platforms. PYMNTS’ research has found that consumers not only want to feel safe when shopping but also want assurances that their data is safe from the onboarding experience to the final transaction. Our data reveals that consumers may leave a platform at any time if they feel that their PII may be at risk. The challenge for merchants in the future will be to make consumers aware of the steps being taken to protect their data and make them trust that those measures are working for their benefit.

The Privacy Paradox: Securing Data To Build Customer Engagement

ABOUT DISCLAIMER

PYMNTS.com is where the best minds and the best content

meet on the web to learn about “What’s Next” in payments and commerce. Our interactive platform is reinventing the way in which companies in payments share relevant information about the initiatives that shape the future of this dynamic sector and make news. Our data and analytics team includes economists, data scientists and industry analysts who work with companies to measure and quantify the innovation that is at the cutting edge of this new world.

Providing essential security and compliance infrastructure, Very Good Security (VGS) enables startups and enterprises to focus on their core business instead of compliance and regulatory overhead. With one single integration, VGS customers unlock the value of sensitive data without the cost and liability of securing it themselves, while also accelerating compliances like PCI, SOC 2, GDPR and more.

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