Consumers View Security Breaches as Online Concerns

walmart-buy-online-pay-in-store-with-cashIt’s funny how consumers react to the news of retail security breaches. And we can look at this example Razorfish GVP of Commerce Strategy Jason Goldberg (a.k.a. @retailgeek) brought up during his keynote at ChannelAdvisor Catalyst on March 31.

Back in 2012, Walmart introduced Buy Online, Pay In-store with Cash. Great concept here: Consumers could place an order online, select the option, print the receipt, proceed to their local Walmart location, use cash to pay for their online purchase, and then wait for Walmart to ship their order.

Walmart had done its homework: According to three-year-old Rasmussen survey data on the Buy Online, Pay In-store with Cash fact sheet, 47% of U.S. consumers were “wary of using credit cards online.” So it wasn’t a big surprise when 4% of Walmart’s ecommerce sales that first year were Buy Online, Pay In-store with Cash.

What was a surprise is how these customers paid: They came to a Walmart store, and paid for their Buy Online, Pay In-store with Cash order with… you guessed it… a credit card.

This past June, a USA TODAY survey found that 24% of Americans have at least temporarily stopped buying online because they were concerned about security breaches. Consumers are wary of using credit cards to make an online purchase, even though most of the retail security breaches reported since the 2013 holiday season (Target, Michael’s, Goodwill, The Home Depot, Neiman Marcus, Staples, Kmart) were traced back to in-store systems.

So why is ecommerce getting the bad rap for in-store breaches? It’s a matter of trust.

When you hear on the news or reads online that credit card data stored by a retailer is stolen, you automatically assume its a cyber crime. Because, of course, credit cards and debit cards are only used online, right (Ha-ha, ha-ha)?

Online and brick and mortar retailers (and banks and payment processing firms) share the burden of payments breaches. And together, they need to come up with a solution. Especially since pin-and-chip technology is coming to America, and may lead to an increase in online fraud.

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