Aug 23 , 2010

Canadians wary about mobile transaction security

By Robin Arnfield, News Editor

A survey of Canadian consumers by KPMG International has uncovered significant concerns about mobile transaction security and also about the privacy of using cloud computing services.

KPMG interviewed 300 Canadian consumers earlier this year as part of a global survey of consumers for its fourth annual Consumers & Convergence study. It found that 63 percent of Canadian consumers were "very concerned" about privacy issues when using a mobile device, compared to 59 percent for global respondents. When asked about mobile device security issues, 58 percent of Canadians said they were “very concerned,” compared to 67 percent for global respondents.

Only 19 percent of Canadians feel comfortable using their cellphone for financial transactions, compared to 34 percent of global respondents. “The fact only 19 percent of Americans surveyed feel comfortable using cellphones for financial transactions is significant,” Brendan Maher, National Industry Leader of KPMG's Information, Communications and Entertainment practice, tells Payments Business. “North Americans have a very high adoption of fixed Internet services for web banking and e-commerce, so naturally they mostly use PCs for these types of transactions.”

However, in other parts of the world, there is much less PC Internet usage, so consumers are forced to use mobile devices for financial transactions, Maher says. “As a result, their confidence in mobile transactions is higher than in North America.”

According to the KPMG survey, 8 percent of Canadians have made purchases using a cellphone through a retailer's website. This is double the percentage seen in 2009, but is significantly less than the 28 percent of global consumers who have shopped online using a mobile device. Also, 15 percent of Canadians have carried out online banking transactions through a mobile device, compared to 45 percent globally.

Maher says that major Canadian banks and retailers are gradually entering the mobile transaction arena. “In time, we will see greater adoption of mobile payments and banking in Canada, especially among younger consumers,” he says. “At this point, we are still seeing a number of m-payments trials, such as a near-field communications (NFC) pilot involving Société de transport de Montréal, ViVOtech and Bell Mobility.”

Currently, NFC is seeing a far greater adoption rate in Asia and Europe, particularly in Japan, than in North America, Yvon Audette, National Leader of KPMG's IT Advisory Services, says. “We expect that in time this will change, however.”

The KPMG survey also revealed that Canadian consumers are very concerned about cloud computing security. “If you use a service such as Google Docs or Hotmail, then you are using a cloud,” Audette tells Payments Business. “Canadian consumers are generally comfortable about storing emails or photos on a cloud. However, they are reluctant to store sensitive personal information on a cloud, as they realize that most clouds actually are located outside Canada, for example in the U.S. They are concerned as to what data privacy policies and security practices the cloud operators are deploying.”

The survey found that 72 percent of Canadian consumers use some sort of cloud computing services such as Google Docs and Hotmail, compared to 51 percent of Americans and 66 percent of global respondents. Also, 48 percent of Canadians have downloaded media such as music, movies, or games, compared to 64 percent globally and 39 percent in the U.S. Storage in the cloud is largely for e-mail, photos, and contacts, with transactional usage at only 13 percent for Canada, 24 percent globally and 8 percent in the U.S.






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