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Nine out of ten Australians would stop spending with a company if their personal data is compromised

PCI Pal the global provider of cloud-based secure payment solutions – has today announced the findings of a survey that uncovers Australians’ sentiment towards, and behaviours around, data security and payments following the COVID-19 pandemic.

A significant 90% of consumers admitted that their brand loyalty would come into question, if their personal data is compromised as a result of poor data security practices, with 38% of people confirming they would avoid purchasing from the firm for a couple of months, 25% would avoid purchasing for several years, while 27% said they would never return to the business in question. Only 10% of the 1005 people interviewed said their customer loyalty would not be impacted.

When asked what it would take to persuade them to return to a brand following a breach, 43% said they would need to see confirmation from a regulator or third party that their systems are safe.

With many firms switching to home or hybrid working since the pandemic, it is important for them to understand the impact this may have on consumer trust of payment processes. 70% of people interviewed cited concern about sharing their payment details with organisations whose staff are working remotely or from home.  Of these, 43% expressed slight concern, while more than a quarter (27%) said they are extremely concerned.

The research, which has been published in a new report, This is Australia: The State of Security in the Eyes of Australian Consumers 2022, has found that although consumers are more wary, few automatically vet a company’s security practices before handing over their personal information. Just 27% of consumers ask firms directly, or do their own research into companies’ security practices. Just over half (51%) of respondents said they don’t vet companies before giving them personal information, despite believing that they should, while 22% of consumers simply trust that their data will be handled safely.

Even though thorough vetting may not be a regular practice of many consumers, there are certain red flags that can decrease trust and stop a buyer from proceeding with a purchase. Being asked to read payment card details out over the phone would lead to 35% of consumers to request an alternative method, while almost a third (31%) told researchers that they would be deterred from completing a transaction if the payment process felt ‘sketchy’.

Brand reputation plays an important part in consumer payment behaviour, with 46% of respondents reporting that their level of comfort when reading their payment card details over the phone depends on the company they’re speaking to. Over a quarter (26%) of respondents said that they refuse to pay over the telephone and will only complete transactions online, or in person.

Interestingly, since the pandemic, the industries that consumers trust the least in relation to their perceived data security practices has substantially changed. In 2019, retail was cited by 50% of consumers as the riskiest sector in terms of data security , followed by travel (40%) and the financial sector (36%).  In 2022, this has switched, with finance perceived as the riskiest sector for personal data security, cited by 44% of consumers, followed by government (39%). Just over a quarter (26%) of respondents mentioned lack of trust in the retail sector’s data handling practices.

The survey also revealed a greater number of consumers that trust local organisations with their personal information versus national firms. More than half (55%) are inclined to trust local stores more, with 35% specifically feeling that they ‘care more’ about their reputation, while the other 20% feel that hackers are less likely to target local organisations  since they are too small.

Just over half of the respondents were speaking from direct experience with 51% of people confirming that they have been the victim of a data hack or security breach. Of those, 14% of people say they have stopped spending money with the brand responsible for the leak, 13% have changed their passwords, and 5% have switched banks or payment card provider.

Adam Paton, VP Sales ANZ at PCI Pal said, “With only 8% of consumers we interviewed stating that they feel less concerned about how companies have been handling their personal data or data security since the pandemic, it’s clear there is some reticence and businesses need to work hard to demonstrate the steps they have in place to safeguard their customers’ personal information. In fact, 40% of those we spoke to said that trust in a brands security does impact their spending with them, saying if they believe the brand to be responsible and secure, they will spend more with them.

“Based on the patterns we’re seeing among Australian consumers, it is evident that trust in a brand is exceptionally important. With all this in mind, Australian businesses must consider how best to maintain and grow trust among a cautious consumer base that is clearly looking for security assurances when making future purchases.”

PCI Pal has recently opened an office in Sydney, further expanding its successful array of trusted payment security solutions into Australia’s extensive pre-existing contact centre market. The company is further focused on helping Australian businesses safeguard customer trust by providing true cloud secure payment solutions.

Get your copy of the press release in full here.

Read White Paper (pdf)

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