Security And Privacy Issues Keeping Millions From Shopping Online

Security and privacy issues are the primary reasons why 73 percent of Canadian Internet users have never made a purchase online, according to the results of an Angus Reid Group online survey conducted among 1,125 web users in March. Security concerns rank number one among Canadian Internet users. Eighty-four percent of online Canadians are concerned about giving out personal information, such as a credit card number, over the Internet - 45 percent are very concerned and 39 percent are somewhat concerned.

Nearly three-quarters of Internet users who have never shopped online (74%) say they have not made a purchase because they are concerned about the security of giving their credit card information over the Internet, and another 52 percent indicate they have concerns about releasing personal information. Other barriers to online shopping include not being able to see or touch the product (43%), preference for traditional ways of shopping (41%), follow-up concerns (40%) and shipping costs (35%), which are all mentioned far less frequently.

Concerns about security and privacy are not singular issues. The Angus Reid Group's quarterly Canadian Inter@ctive Reid Report asked a series of questions about security to help further understand consumers' fears.

It found a significant number of Internet users hold specific concerns about:

• The security of the database housing your credit card information (62% are very concerned);
• The online company knowing it is you, not someone else making the transaction (51%);
• Credit card information being used for unauthorized transactions (57%);
• Credit card being intercepted in transit while making an Internet purchase (54%); and,
• Discrepancies between you and the online company being dealt with in a fair and reasonable way (42%).

"This is the message that Internet users have been telling us for the past two or three years, and it hasn't let up," said Steve Mossop, Senior Vice President and leader of the company's Canadian Internet practice. "Consumers are tired of the experts telling them that this issue will go away once they realize how safe and secure online transacting actually is," Mossop said. "It is important to note that concerns about security and privacy issues are held among both novice and expert Internet users, as well as frequent and infrequent online shoppers. The amount of money left on the table by Canadian web retailers as a result of this is simply staggering - probably billions of dollars."

Awareness of well-publicized hacker activities is fuelling online security concerns. Ninety percent of online Canadians are aware that hackers had breached the security of some major North American sites - shutting them down by sending an overwhelming amount of traffic to the sites. And 64 percent are also aware of stories where hackers had broken into websites and accessed credit card numbers which they then posted on their own websites for everyone to see. Two-thirds of those polled agree that their attitudes about online shopping have been negatively influenced by awareness of these two situations.

"This kind of hype has not helped the situation," says Mr. Mossop. "Stories such as this further heighten the importance of security issues and undermine consumer confidence in the entire e-commerce sector. As a result, organizations should not underestimate the importance of online security when developing or upgrading their website."

Internet user perceptions about who should primarily be responsible for solving Internet security issues, and the confidence they have in these institutions differs greatly. When asked who should be most responsible, Canadian Internet users are split between the infrastructure companies (31%) and the websites themselves (31%). However, Internet user confidence among these two institutions' abilities to solve the security issue is lacking, as only half are confident that the infrastructure companies can solve the problems, and even fewer (41%) express confidence in the website companies. Although fewer believe improving online security should be the responsibility of credit card companies (17%), people are very confident in the ability of credit card companies (62%) and the banking industry (67%) to solve online security problems. Few (8%) believe that government should play a major role in improving online security, and confidence in this institution is most lacking (32%).

Despite the high level of concern with conducting online transactions, relatively few Canadians are willing to pay more for products and services if security is guaranteed. Only 24 percent of existing online shoppers, and 14 percent of those who have never shopped, indicate that they would be willing to pay more.

"This shows that consumers have an expectation that security should be addressed, but most don't expect to have to pay more for it," Mossop said. "Consumers want up-front security policies, a privacy code and guarantees about their online transactions. Anything less and consumers will simply click away."

The "Canadian Inter@ctive Reid Report" is the largest, most comprehensive and authoritative source of its kind about quarterly Internet trends in Canada. The results are based on two separate data collection instruments. In the first, 1,125 web users from Angus Reid Group's Canadian Internet Panel are surveyed online. Panelists are chosen through random telephone surveys conducted on an ongoing basis across Canada. Results are complemented by a further 1,500 interviews via telephone with Canadian adults in order to verify results of the panel, and track issues among non-Internet users.

These data are statistically weighted to reflect the population proportions of regular online users by length of access to the Internet and online expertise, regional distribution, as well as demographics such as gender, age and income. Our panelists represent approximately 11.1 million Canadian adult Internet users who are online for one hour a week or more (there are a total of 14.1 million adults who have Internet access - but not everyone can be classified as a regular user).

With a national sample of 1,000 and 1,500 (for each component), one can say with 95% certainty that the overall results are within a maximum of 177 3.1 percentage points of what they would have been had the entire population of Canada's regular online users been surveyed. The margin of error will be larger for sub-groupings of the survey population.

To view the complete media release please download the PDF file.

Steve Mossop
Senior Vice President
Angus Reid Group
(604) 257-3200