Study: Online Security Concerns Fading Fast

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Credit card security, one of the early concerns of the Internet, is quickly becoming a nonissue as e-commerce continues to accelerate, according to a NetSmartAmerica.com study.


Only 29 percent of 1,000 online consumers said they have strong security concerns, down from 35 percent last year. And 32 percent of those who expressed concerns made online credit card purchases anyway.


These findings may signal an end to the perceived "security problem" of the Web, according to Bernadette Tracy, president of NetSmartAmerica.com, New York.


"Security concerns are virtually evaporating," she said. "Convenience outweighs the hypothetical concerns."


E-commerce has been making healthy strides this year, with 76 percent of online users making at least one online purchase, up from 59 percent in 1999. Also this year, 70 percent paid with a credit card vs. 66 percent last year.


However, the latest Web worry is privacy, as 85 percent of respondents said they were concerned with the sale of their personal information to third parties. Ninety percent worried about privacy as a whole.


"It's not going away anytime soon because of the constant media hype with hackers and '60 Minutes' reports about people losing their house because someone stole their identity," Tracy said.


The solution to this problem is simple, she said. "You need to have a privacy link on your home page. If I don't see a privacy policy on your home page, I won't shop on it. It's like the Good Housekeeping seal of approval; I just need to know it's there," she said.


Another barrier to e-commerce is the Web site itself, as 53 percent of respondents abandoned their full shopping carts before purchasing the items from e-tailers. The primary reason consumers bailed out of purchases was check-out difficulties, as cited by 58 percent of the respondents.


"Web sites need to have a dialogue-based text box and outsource their customer service help to a third party," Tracy said. "So if I have a question about how do I buy, then I can just click on a button that says 'shopping help' and I'll be linked to a live digital representative and then we can interact. It's less expensive than having an 800 number. Remember, I'm one click away from your competitor."


The other reasons for abandoning a shopping cart were security concerns (35 percent), "just looking" (35 percent), high shipping costs (34 percent) and no customer service (26 percent).


The most popular items purchased online were gifts (46 percent), software (44 percent), books (43 percent), CDs (37 percent), wireless devices (37 percent) and computers (30 percent).


When asked what consumers are doing less as a result of their Internet surfing habits, 45 percent of respondents said watching television, 32 percent said calling long distance and 27 percent said high-ticket shopping.


The NetSmart America VI report was based on telephone interviews conducted in May among 1,000 adults in the United States.
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