Three out of four (74 per cent) Australian consumers claim their confidence in a brand’s data security influences how they spend money with that brand.
That’s according to new global research conducted by payment security specialists PCI Pal together with cloud telephony platform provider Natterbox.
More than 2,000 consumers participated in the ‘This is Australia’ research which investigated the sentiment towards data security and the impact on consumer behaviour.
The rising rate of credit card fraud, scammer activity and security breaches in Australia is giving consumers pause when they hand over their payment and personal data.
The research revealed that more than one in three (34 per cent) consumers have been a victim of a security breach or hack – the statistics are even greater (40 per cent) for baby boomers and high-income earners.
“The way companies safeguard their customers’ personal data is impacting which brands are trusted and how much consumers spend with those brands,” observed PCI Pal CEO James Barham.
“The combination of high-profile breaches and personal data loss experiences has made data security top-of-mind for Australians when they reach for their wallets,” Barham explained.
Around half (49 per cent) of respondents are not comfortable giving their credit card details over the phone while 56 per cent would opt for an alternative payment method.
One-third of young consumers (aged 18 – 24 years old) claimed to ‘absolutely refuse’ to share their payment information over the phone.
The retail sector was the least trusted industry for protecting the customer’s personal data security.
“At a time when Australian retailers are experiencing challenging times, these findings indicate businesses must take data security seriously to ensure, and in some cases win back, consumer confidence and brand loyalty,” said Barham.
With 43 per cent of consumers saying they would never return to a brand post-breach, and a further 43 per cent reporting they would suspend purchasing in the aftermath of a breach, many Australian consumers are unwilling to forgive a company that compromises their personal data.
The consequences of a security breach are severe and immediate for businesses.
The small business sector in Australia is also perceived to be in the low-trust category.
Over half of consumers surveyed trusted large national companies over small local businesses, based largely on the belief that larger organisations invest more in security.
Natterbox Limited Australia managing director, VP Asia Pacific Charles Heunemann, believes the solution for business is to stay one step ahead of the hackers to protect themselves and their customers.
“Contrary to popular belief, pausing call recording during a Cardholder Not Present (CNP) transaction is not PCI DSS compliant.
“Any consumer-facing business, large or small, should be prepared for the increasing likelihood of an attempted hack and invest in technology that does not require customers verbally give their credit card details over the phone.
“Consumer confidence has been eroded by increasingly common data breaches, so businesses must intensify their efforts to reassure consumers that their data is safe,” he said.