PAYPAL TRUST & SAFETY STUDY

PayPal Trust & Safety Study



September 2008
Dene Rogers (1-408-967-5536 or grogers@paypal.com)


Prepared by


                                           Confidential and Proprietary
Objectives, Methodology and Sample




                        Confidential and Proprietary   2
Objectives and Target Population
Background
•! As part of the ongoing effort to strengthen the PayPal brand, particularly in the sphere of
   information security and protection, PayPal sought to understand the current practices and
   vulnerabilities of the internet users in the United States, Canada, France, Germany, Spain
   and the United Kingdom.


Objectives
•! To develop interesting and informational material for press releases highlighting PayPal’s
   role providing information security:
    –! Demonstrate the need for consumer protection against identity theft and fraud
    –! Position PayPal as the consumer advocate for online safety and privacy
    –! Secure coverage of PayPal’s Privacy Rating and consumer protection offerings


Target Population
•! The research covered the following target groups:
    –!   Online consumers who have purchased something online in the last 3 months.




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Methodology and Sampling Frame
Methodology
Quantitative research:
•! Online based survey through email invitations sent to online panelists.


Sampling Frame
•! The total sample size of 1,000 respondents per country.
•! Quotas were set up during fieldwork to ensure sample distribution by age and
   gender, as well as PayPal usage.
•! The sample supplier for this study was E-Rewards.
•! Fieldwork was conducted from May 28th – June 3rd, 2008 in the United States,
   August 15th – 25th in Europe.




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Top Headlines




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Global Findings:
Identity theft is a growing and poorly understood problem
 •! Identity theft is more pronounced in English speaking countries. 1 in 10
    online consumers in Canada, the UK and the US have been victims of ID
    theft. Only about 1 in 20 are ID theft victims in France, Germany and
    Spain.
    –! Over a third of victims have no idea how the identity theft happened and two-
       thirds had to be told about it by their creditors or the authorities.
 •! Almost all online consumers register some level of concern with online
    scams and identity theft.
    –! That level of concerned has remained high over the last decade, even while
       concerns with other aspects of online shopping have subsided.
    –! Unsurprisingly, victims and friend of victims have the highest levels of concern.
 •! Credit cards are the most often used form of payment online.
    –! However, among PayPal account holders (who are familiar with PayPal’s security
       policies) PayPal is thought to be the most secure payment method, better than
       credit cards or gift cards.
 •! Among online social network users, 1 in 6 display information on their sites
    that they also use for their passwords.
    –! That is about 1 in 15 online consumers are putting themselves at risk by
       displaying password related information on social networking sites.
    –! “How secure is using Fluffy’s name when your MySpace page is dedicated to
       Fluffy?”




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Canadian Findings:
Anglo-American block

 •! Canadian online shoppers are similar to American and British consumers in
    terms of experiences and tastes.
    –! Three quarters (73%) of Canadian online consumers have online banking. PayPal
       account holding is relatively lower at 44%.
        •! Canadians are very confident in their online banking security (90% secure).
    –! One in ten Canadian online shoppers have experienced ID theft, an additional
       24% know an ID theft victim.
        •! Canadian frequent online shoppers (13%) tend to be slightly more likely to be ID theft
           victims.
    –! Canadian consumers’ top online shopping concerns are protecting privacy (53%
       very concerned), preventing fraud and ID theft (46%) and excessive shipping
       fees (43%).
        •! Fraud has decreased 6 percentage points as a concern for Canadians since they started
           shopping online. Shipping fees are essentially unchanged as a concern over the same
           period.
    –! Canadians are heavily reliant on credit cards.
        •! 92% use credit for online shopping. The closest alternative payment method, PayPal, is
           only used by 38% of consumers.
        •! Canadians are big on credit card convenience. 51% say they use them for that reason.
        •! Canadian PayPal users are more likely to say they are required to use PayPal (37%) than
           any other reason.



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German Findings:
Cautious and Secure

 •! German online consumers have the lowest levels of trust in E-commerce...
    –! Two-thirds (65%) of German online consumers have an online bank account
        •! Germans are the least confident in the security of their online accounts (49% secure; 47%
           somewhat secure).
        •! And more Germans than any other nationality think offline banking is more secure (41%).
    –! Fewer than half German online consumers rate either credit cards (45%), debit
       cards (40%) or PayPal (47%) as secure.
        •! However German PayPal users are more confident (67% secure).
    –! While over half of German consumers (54%) save their credit cards with online
       retailers, few Germans (31%) use their computer browsers to store passwords.
 •! …But Germans have the lowest levels of ID theft and concern with online
    crime.
    –! Less than one in thirty (3%) German online shoppers have experienced ID theft,
       and only 10% know a victim.
        •! Germans have the least concern that ID theft will happen to them (23% very concerned,
           49% somewhat concerned).
        •! Germans receive the least amount of “phishing” emails with 78% receiving 1 a month or
           none.




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Spanish Findings:
Unique Concerns

 •! Spanish online consumers have some of the lowest levels of exposure to
    online commerce.
    –! Less than half (49%) of Spanish online consumers use online baking. A similar
       number (50%) have PayPal accounts, and only 27% have both.
        •! Spanish online banking users are satisfied with the safety of their online accounts (89%
           secure).
        •! Spanish online consumers also report the least experience with online shopping. 76% have
           been shopping online for less than five years, and only 9% shop weekly or more often.
    –! Spanish online consumers also have the lowest rate of social networking site
       usage (34%) of the 6 countries in this study.
    –! Spanish consumers are the least familiar with the terms “spam” (58% very
       familiar), identity theft (32%), spyware (42%) or “phishing” (29%).
 •! As a result, Spanish online consumers have unique concerns and
    preferences.
    –! As addition to being concerned about online fraud (83%), Spanish consumers are
       also very concerned about the reliability of online commerce in general.
        •! 84% are concerned that the purchased product will not be as pictured or imagined, 83%
           are concerned about poor product quality, and 82% are concerned about not receiving the
           product at all.




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French Findings:
Potentially At-Risk
 •! French online consumers resemble those in other countries.
    –! Two-thirds (68%)of French online consumers have online baking. PayPal has a
       fairly low market penetration at 36%.
    –! 6% of French online shoppers have experienced ID theft, an additional 18% know
       a victim.
        •! French ID theft victims are most likely to discover it through their credit card statements
           (45%) and are most likely to contest the charges with the credit card company (70%) or
           report the fraud to the police (52%).
    –! French consumers’ top online shopping concerns are protecting privacy (40%
       very concerned) and preventing fraud and ID theft (43%).
    –! French consumers are the most reliant on credit cards of any nationality
       surveyed.
        •! 95% use credit for online shopping. The closest alternative payment method, PayPal, is
           only used by 33% of online consumers.
 •! But they have the most potentially problematic situations for identity
    security.
    –! Only 58% of French financial websites require a 2nd level of security like a pin
       code or security question.
    –! 46% of French consumers have 3 or fewer online passwords. 52% change them
       only when required or never.
        •! 50% of French online consumers save passwords in their computer.
        •! 14% of French online consumers are at risk because they display information on their
           social networking sites that they also draw upon to create online account passwords.



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British Findings:
Mature Online Markets

 •! The United Kingdom has perhaps the most developed online marketplace
    of any country surveyed.
    –! Four-fifths (81%) of British consumers have online banking. Two-thirds (66%)
       use PayPal.
        •! British consumers also have the highest rates of PayPal (58%) and debit card (63%)
           usage of any market surveyed.
        •! British credit card users are the most likely to say they use credit because it is the most
           secure (30%). They are also likely to say they are required to use PayPal (38%).
        •! British consumers are also the least confident in the offline security of any payment
           method (cash, check etc) compared to other nationalities.
        •! British consumers are most likely to receive financial statements in an electronic format
           only (19%).
    –! With development comes problems.
        •! 14% of British respondents report they have been the victims of identity theft.
        •! Half of British online consumers are very concerned about fraud & identity theft (49%) and
           protecting privacy online (50%).
        •! British respondents report the most phishing attacks (34% receive at least one phishing
           email a day) and spam email (33% at least 10 a day).




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Detailed Findings
Identity Theft




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Spam is a universal language

  •! Spam is the most familiar online
     hazard across Canadian and Western
     European online consumers more
     than two-thirds typically being very                                                                  CA        DE       ES     FR   UK
     familiar with the pest emails (virtually
     all have some familiarity).                                               Spam                         73       76         58   68   78
  •! Familiarity with identity theft
     concentrates in the English speaking                                      Identity theft               66       36         32   41   74
     world where better than two thirds
     are very familiar with the term.                                          Spyware                      58       43         42   46   58
           –!    In continental Europe it is very
                                                                               Phishing                     45       50         29   32   55
                 familiar to about a third of online
                 consumers.
                                                                               Credit card cloning          41       25         27   24   62
  •! Germans (50% very) and British
     (55% very) are the most familiar with                                                            [% “very familiar”]
     phishing
                                                                                                Top third of responses
           –!    Frequent online shoppers (weekly
                 or more) and PayPal customers                                                            Middle third
                 tend to be more familiar with all                                                         Lower third
                 these online hazards.


Q29a. How familiar are you with each of the following online terms?
(Very familiar, somewhat familiar, Not very familiar or Not at all familiar)
[Not asked in US survey]                                                                          Base (all)=1000 per country


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Identity theft is more prevalent in the English-speaking world

  •! As reported by online consumers,
     identity theft is a bigger problem in
     the English speaking world than in
     other parts of Western Europe.
          –! More than a third of online
             consumers in English speaking
             countries report some experience
             with ID theft.
          –! Typically, only one in five French or
             Spanish online consumers report
             experience with identity theft.
          –! German online consumers have the
             lowest experience with ID theft.
  •! Victims and relations of identity theft
     victims are more likely to be frequent
     online shoppers and use social
     network sites.
  •! Victims and relations are also likely to
     be more concerned about ID theft
                                                                                                               [Multiple response allowed]
     happening again and change their
     passwords more frequently as a
     result.
Q31. Have you or someone you know been the victim of identity theft?
(Yes, I have been a victim of identity theft; Yes, someone I know has been the victim of identity theft; No)   Base (all)=1000 per country


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Victims report identity theft from a range of perpetrators

  •! In France (42%), the UK (40%) and
     the US (43%), victims of identity                                                       CA       DE*      ES*         FR*   UK      US
     theft often do not know how the
     misfortune befell them.                                       Unknown                   30        21       22         42      40        43
  •! German (38%) and Canadian (32%)                               Credit/debit card
     victims report a higher prevalence of                                                   32        38       14         14      23        26
                                                                   stolen
     credit or debit card theft.
                                                                   Business lost/gave
          –!     Women typically report higher rates                                         21        15       16         17      16        20
                                                                   away financial info
                 of credit or debit card theft.
                                                                   Financial papers
  •! Only in Spain is online fraud including                                                  4         9          6        9      3         6
                                                                   stolen
     email fraud (32%) or viruses and
                                                                   Computer virus/
     spyware (20%) a significant problem.                          spyware
                                                                                              5         9       20         14      6         8
          –!     Spanish online fraud victims tend to
                 be younger (under 44), less affluent              Email fraud                4         3       32          6      3         3
                 and less educated.
                                                                   Other                     20        18       10         12      17        18

                                                                                             [Multiple response]

                                                                                         Top third of responses
                                                                                                    Middle third
                                                                                                    Lower third
                                                                                      Base (is a victim of identity theft)
                                                                              N=CA: 96, DE: 34, ES: 50, FR: 64, UK: 144, US: 114
Q32. How did this identity theft occur? Your best guess is fine.                          *indicates small base size


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Friends and relatives of ID theft victims also report a
   variety of culprits

  •! People who know an identity theft
     victim, but are not themselves                                                           CA       DE         ES        FR   UK    US
     victims, are less aware of the causes
     of identity theft.                                            Unknown                    36        39        36        32   39        49
  •! Credit and debit card theft is the                            Credit/debit card
     most mentioned option, but by less                            stolen
                                                                                              37        22        25        30   23        28
     than one in three relations of identity
                                                                   Business lost/gave
     theft victims.                                                                           17        19        15        9    12        13
                                                                   away financial info
                                                                   Financial papers
                                                                                               8         6        6         13   10        11
                                                                   stolen
                                                                   Computer virus/
                                                                                               7        11        10        11   5         6
                                                                   spyware

                                                                   Email fraud                 4         4        10        3    5         4

                                                                   Other                       9         7        8         10   14        11

                                                                                              [Multiple response]

                                                                                         Top third of responses
                                                                                                   Middle third
                                                                                                    Lower third

                                                                                     Base (knows a victim of identity theft)
Q32. How did this identity theft occur? Your best guess is fine.             N=CA: 261, DE: 95, ES: 146, FR: 180, UK: 331, US: 379


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Most ID theft victims find out about it the hard way

  •! Most victims of identity theft find out
     that they have been robbed when the                                                CA       DE        ES          FR       UK    US
     bill comes due on the credit card or    From credit card
     through the bank.                                                                  16       27        35           45      24        21
                                             statements
          –! Typically a quarter of ID theft
                                                     Contacted by bank                  30       26        21           30      30        20
             victims are notified by their bank
             and an additional quarter discover it   Contacted by credit card
                                                                                        29       18        11           4       22        26
             in their credit card statements.        company
          –! Spanish and French victims are          Received bill for item
             most likely to discover the crime                                          17       15        20           13      13        22
                                                     they didn’t purchase
             through their credit card
             statements.                             Contacted by merchant               8        11        7           6        6        10
          –! A quarter of victims in English         From credit report                  5        6         9           2        3        8
             speaking countries were contacted
             about an anomalous charge by their      Contacted by collection
                                                                                         7        5         8           2        4        8
             credit card companies.                  agency
          –! Respondents in non-English              Denied loan or credit               5        6         5           2        3        8
             speaking countries report less
             contact from their credit               Other                               7        6         7           8       11        14
             companies.
                                                                                                        Top third of responses
                                                                  [Multiple response]                              Middle third
                                                                                                                       Lower third
                                                                            Base (is or knows a victim of identity theft)
Q33. How did you discover the identity theft?                         N=CA: 341, DE: 126, ES: 193, FR: 240, UK: 454, US: 480


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Responses are divided between cutting losses and fighting
   the charges

  •! The most popular response to identity
     theft is to cancel the credit card or
     bank account associated with it.
  •! Also popular in Canada, France and
     the UK is contesting the charges with                                                                         CA        DE          ES      FR        UK
     the credit card company or bank.
                                                                                   Cancel the account               52        55         48      39        48
  •! Almost half of ID theft victims say
     they reported the incident to the                                             Contest the charge with
                                                                                                                    54        43         26      70        52
     police.                                                                       the credit card/bank

                                                                                   Report to the police             39        43         53      52        44

                                                                                   Contest the charge with
                                                                                                                    22        20         15      25        17
                                                                                   the merchant
                                                                                   Place an alert on your
                                                                                                                    30        16         15      18        14
                                                                                   credit report

                                                                                                            [Multiple response]

                                                                                                      Top third of responses
                                                                                                                 Middle third
                                                                                                                  Lower third



Q33a. What did you/someone you know do after they discovered the identity theft?                 Base (is or knows a victim of identity theft)
[Not asked in US survey]                                                                       N=CA: 341, DE: 126, ES: 193, FR: 240, UK: 454


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Concern about scams and identity theft is high

  •! Three-quarters of online consumers
     have some worry that they will fall
     victim to identity theft. One-quarter
     are very concerned.
          –!    Women, victims of ID theft and
                relations of victims are the most
                concerned about identity theft
                affecting them.
  •! Canada, Spain, the UK and the US
     have the most concerned online
     consumers, with Spain having the
     largest number of very concerned.
  •! Germany and the France have the
     lowest levels of concern with ID theft.




                                                                                Very concerned –        Slightly concerned          Not at all concerned
                                                                                scams are getting       – It seems everyone          – I am very diligent
                                                                                 worse and worse        knows someone who           about how and when I
                                                                                 and it’s bound to      has had their identity      disclose my personal
                                                                                  happen to me                  stolen                    information
Q34. How concerned are you that identity theft will happen to you personally?                        Base (all)=1,000 per country


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Privacy and protecting identity are dominant concerns of
   online shopping

  •! Protecting their privacy and the
     related protection from fraud and ID
     theft are online consumer’s two                                                                      CA        DE       ES           FR       UK        US
     biggest concerns.
                                                                                  Fraud or identity
         –! Online consumers in Canada and                                                                 46       25        48          43       49        36
                                                                                  theft
            the United States are also
            concerned about shipping fees.                                        Protecting your
                                                                                                           53       22        39          40       50        NA
                                                                                  privacy online
         –! Spanish consumers are worried
            about not receiving the product at                                    Not receiving the
                                                                                                           32       13        42          38       30        24
            all.                                                                  product
         –! German online consumers are                                           Poor product
                                                                                                           34       14        38          34       29        30
            unique because they are not                                           quality
            overwhelmingly concerned about                                        Not being able to
            any online shopping problems.                                         exchange the             36       15        38          29       28        31
                                                                                  product
                                                                                  Product not being
                                                                                  as pictured or           32       15        36          30       25        29
                                                                                  imagined
                                                                                  Shipping, postage
                                                                                                           43       11        26          32       26        45
                                                                                  or packing fees

                                                                                             [% “very concerned”]         Top third of responses
                                                                                                                                         Middle third
Q18. How concerned are you with each of the following when shopping online?                                                              Lower third
(Very concerned, Somewhat concerned, Note very concerned, Not at all concerned)                         Base (all)=1,000 per country


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Identity theft has become the dominant concern of online
   shoppers over the last decade

  •! Online consumers in Canada, Spain
     and the UK have the highest levels
     of overall concern with ID theft.
         –! Consumers in Canada, Germany,
            the UK and the US have all
            increased in concern about ID
            theft over when they began
            shopping online.
         –! Spanish consumers are fairly
            unchanged with a high level of
            concern.
         –! French consumers are actually
            less concerned now.




Q18/18a. When shopping online in general, how concerned are you with each of the
following? Fraud or identity theft
(Very concerned, Somewhat concerned, Note very concerned, Not at all concerned)    (Total Concerned)
*US data from the 2008 PayPal 10th Anniversary Survey*
    Q20/21. When you first started shopping online in …, how concerned were you
                                                                                      Base (all)=1,000 per country
    about each of the following when making purchases online?


                                                                                       Confidential and Proprietary   21
Germans see the least phishing, English speaking
   countries see the most

 •! More than two-thirds of respondents
    report getting at least one phishing
    email.
        –! German online consumers report
           the lowest rate with 2 out of 5
           receiving no phishing email.
        –! Canada, France and the UK report
           the most phishing attacks with
           16% of consumers receiving 300 or
           more per month                                             None     1-9        10-29        30-99    100-199       200-299       300+

 •! Over half online consumers get at
    least one spam message a day, one
    in six get 10 or more a day.
        –!    Canada and the UK see the most
              intense spamming with 11% and
              10% respectively getting more
              than 20 spam emails a day.




                                                                      None   1-9     10-29     30-99    200-2   300-5       600-1   1200-     3000
                                                                                                         99      99          199    2999       +
Q29b. How many phishing emails have you received in the last month?
Q29c. How much spam email have you received in the last month?
                                                                                     Base (all)=1,000 per country
[Not asked in US survey]


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Detailed Findings
Online Banking and Shopping Confidence




                               Confidential and Proprietary   23
Two-thirds of online consumers have online bank accounts

  •! Two-thirds of online consumers
     (outside of Spain) have online bank
     accounts.
          –! Spain has the lowest level of online
             banking usage at 49%.
          –! Online banking is concentrated
             among the consumers under the
             age of 45, frequent shoppers and
             users of social network sites.




                                                                                           % yes
Q5. Which of the following online services providers do you have an active account.   Base (all)=1,000 per country


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Few online consumers have online brokerage accounts

  •! One in five or fewer online consumers
     have an online brokerage account like
     Ameritrade, Comdirect or Barclays.
          –!    Online consumers with brokerage
                accounts are more likely to be men,
                                                                                      Not asked
                over the age of 45 and more
                affluent (income over $100k
                equivalent).
  •! eBay accounts are concentrated in
     the United States, United Kingdom
     and Germany.
          –! France has the lowest eBay
             subscription rates at 46%.
          –! eBay account holders are more
             likely to be men, under the age of
             45, frequent online shoppers and
             also have a PayPal account.




                                                                                                       % yes
Q5. Which of the following online services providers do you have an active account.               Base (all)=1,000 per country


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Most online consumers show confidence in the security of
   their online bank

•! Among online bank account holders,
   the large majority think their
   accounts are secure. More than a
   third (outside Germany) see their
   bank accounts as very secure.
      –! Canadian and American online
         consumers have the most
         confidence in the security of their
         online banking.
      –! Germans are the least confident.                                      5-very                     3-somewhat                    1-not at all
                                                                                               4                                  2
•! Likewise, most online bank account                                          secure                        secure                       secure

   holders feel that online and offline
   banking is equally secure, although
   over a quarter are more comfortable
   with offline banking.
      –!    Here too German online consumers
            are the most pessimistic with 41%
            saying offline banking is safer.




                                                                             Online banking        Both           Offline banking     Don’t know


Q6.How would you rate the security of your online bank’s login procedures?                  Base (online bank account holders)
Q7. Which do you think is more secure?                                              N=CA:731, DE:646, ES:487, FR: 677: UK: 808, US:669


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Credit Cards are the most common online payment method…

•! Most online consumers prefer to use
   credit cards for their online
   purchases.                                                                                                    CA       DE        ES          FR       UK         US
      –!    Spanish consumers are much less
                                                                                        Credit card              92        82        53          95       86        86
            likely to make use of credit cards
            (53%).
                                                                                        PayPal                   38        36        45          33       58        47
•! PayPal is used by between one-third
   and half online consumers to make                                                    Debit card                8        45        28         NA        63        37
   purchases.
                                                                                        Gift card                11        15        7           4        7         21
      –!    Use of PayPal accounts roughly
            corresponds to subscriptions to                                             Check                     2           1    NA            10       4         8
            PayPal (Slide 24) with the UK, US
            and Spain reporting the most use.                                           Google checkout           2      NA        NA           NA        5         6
•! Debit cards are also widely used in
   UK and Germany.                                                                      Money/Postal order        4           8      4          NA        1         2

•! Bank transfers are widely used by                                                    Cash                      2           7      36          3        2         2
   Germans.
                                                                                        Store/Retail card       NA       NA        NA            11       5     NA

                                                                                        Bank transfer            NA        63        35         NA      NA      NA

                                                                                                        [Multiple response]       Top third of responses
                                                                                                                                                Middle third

Q14. Which of the following methods do you typically use to pay for online purchases?                         Base (all)=1,000 per country      Lower third


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Credit Cards are convenient – PayPal is safe

•! On average, almost a third of PayPal
   users say they use PayPal because it                                                                                  CA        DE          ES   FR    UK
   is the most secure payment method,
   more than either credit or debit                                                                Habit                  8         7          33   22        10
   cards.                                                                                          Convenience            51       53          13   53        37
      –! PayPal also has a high use rate
                                                                                          Credit
         because it is required by certain                                                card
                                                                                                   Security               14       15          13   8         30
         sites.
      –! Only a quarter say convenience is                                                         Easy to track          13        9          19   11        15
         PayPal’s main attribute.
                                                                                                   Required               14       14          22   6         8
•! Credit cards are the most convenient
   payment method for respondents                                                                  Habit                  2         4          11   11        3
   (except for Spain).
                                                                                                   Convenience            24       30          16   24        27
      –!    Spanish online consumers find
            credit cards less convenient (13%)                                            PayPal   Security               30       38          37   27        28
            and use it more out of habit (33%)
            or requirement (22%).                                                                  Easy to track          7        10          14   10        5

                                                                                                   Required               38       18          23   29        38

                                                                                                           Top third of responses
                                                                                                                        Middle third
                                                                                                                         Lower third
Q14a. Thinking again about your preferred payment methods online, what would you say is
 the primary reason you use the following methods to pay for online purchases?
                                                                                                              Base (all)=1,000 per country
[Not asked in US survey]


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While credit cards are thought of as generally safest, people
   in the know choose PayPal

  •! Among all online consumers, credit
     cards are seen as the most secure.
                                                                                                                 CA        DE       ES          FR        UK        US
         –!    German and Spanish online
               shoppers are much less convinced                                       Credit card                 72       45        49         70        73        70
               of credit card security. They rank
               cash or bank transfers more highly.                                    Gift card                   64       52        46         43        47        64
  •! However, among PayPal account
     holders, PayPal is seen as the most                                              PayPal                      64       47        63         61        68        61
     secure.
                                                                                      Debit card                  30       40        43         NA        57        44
  •! Overall, 61% of these online
     consumers find PayPal to be secure.                                              Money/Postal order          45       35        50         NA        35        33
         –!    Only 46% of non-customers give
                                                                                      Cash                        27       62        83         21        22        21
               PayPal a positive ranking on
               security indicating an opportunity to
                                                                                      Check                       28       27       NA          30        28        29
               spread messaging about PayPal’s
               advantages.                                                            Google checkout             28       11       NA          NA        30        22

                                                                                      Bank transfer              NA        66        57         NA    NA        NA

                                                                                      Store/Retail card         NA         NA      NA           39        NA        NA

                                                                                             [% “very or mostly secure”]        Top third of responses
                                                                                                                                           Middle third
Q15. When used online, how secure do you think each of these payment methods are in
                                                                                                                                           Lower third
terms of protecting your identity and money?
(5-very secure, 4, 3-somewhat secure, 2, 1-not at all secure)                                                  Base (all)=1,000 per country



                                                                                                                 Confidential and Proprietary                  29
Most financial accounts require multiple security steps

  •! Most financial websites require some
     second level of security past
     usernames and passwords.
          –!    British sites are the most cautious
                with 96% of British online
                consumers with online bank
                accounts, trading accounts or
                PayPal accounts reporting a 2nd
                level of security.




Q15a. Do any of your online financial accounts ask for a second level of security besides your   Base (PayPal, online bank, and online brokerage account holders)
username and password (like pin number, site key, or security question)?                                 N=CA:828, DE:759, ES:716, FR: 775: UK: 912
[Not asked in US survey]


                                                                                                                    Confidential and Proprietary                    30
Most consumers save their credit card
   information with at least a few online retailers

  •! More than half of credit card using
     online consumers save their credit
     card information with at least a few
     of the online retailers they shop with.
          –! While most countries have a similar
             level of overall password saving
             use, Spanish participants report the
             most intense use with 30%
             reporting that they save their credit
             card info on all the retail websites
             they use.
          –! Frequent online shoppers are more
             likely to save their password
             information as are people who
             infrequently change their
             passwords.




                                                                                                             Base (use credit cards)
Q17. Do save your credit card information and address with online retailers where you shop?   N=CA: 928, DE: 877, ES: 697, FR: 967: UK: 959, US:857


                                                                                                             Confidential and Proprietary             31
Cash is thought of as the safest offline payment method

  •! Offline, cash is still king. Cash, with
     the anonymity it provides, is
     considered the most secure form of                                                                       CA        DE         ES        FR   UK        US
     payment in the brick-and-mortar
     world.                                                                          Cash                     78        71         83        64   64        84
          –! Americans (81%) and Canadians
             (76%) also rate gift cards and                                          Gift card                76        55         63        58   60        81
             certificates highly on security.
                                                                                     Money/Postal order       69        41         60        NA   54        65
          –! Germans (68%) and Spaniards
             (71%) are also positive about the                                       Credit card              63        49         67        68   66        63
             security of bank transfers.
          –! British online shoppers are more                                        Debit card               53        44         63        NA   59        51
             pessimistic about all payment
             methods with no more than two-                                          Check                    46        37       NA          44   40        46
             thirds (66%) rating credit cards as
                                                                                     Bank transfer            NA        68         71        NA   NA    NA
             secure.
                                                                                     Store/Retail card        NA        NA       NA          48   44        NA

                                                                                                           [% “very or mostly secure”]

                                                                                                          Top third of responses
                                                                                                                    Middle third
                                                                                                                     Lower third
Q16. When used offline or in person, how secure do you think each of these payment
methods are in terms of protecting your identity and money?
(5-very secure, 4, 3-somewhat secure, 2, 1-not at all secure)                                               Base (all)=1,000 per country


                                                                                                              Confidential and Proprietary             32
Detailed Findings
Password Protection




                      Confidential and Proprietary   33
Most consumers use multiple passwords,
   but rarely change them
  •! Most consumers have more than one
     password for their online accounts.
     The median number is four to six
     different passwords.
         –! Typically, more than half of these
            online consumers have four or more
            passwords.
         –! Men, frequent online shoppers and
            victims of identity theft tend to
            have a higher number of
            passwords.
                                                                   7 or more            4-6                2-3                   1
  •! Despite having a fair number of
     passwords, most online consumers do
     not change them frequently.
         –! Over a third change their passwords
            only when or if required. An
            additional one in six change their
            passwords once a year or less often
         –! Consumers in Germany and English
            speaking countries change their
            passwords most often, while Spain
            and France do so least often.
                                                              Once a    Every 2-4    2x a       1x a     < once
                                                                                                                     Only when required/never
Q8. How many different online passwords do you have?          month+     months      year       year     a year
Q11. How often do you change your online account passwords?
                                                                                    Base (all)=1,000 per country


                                                                                      Confidential and Proprietary                   34
Most consumers memorize their passwords

  •! Most of these online consumers say
                                                                                     CA       DE        ES           FR       UK        US
     they memorize their passwords.
         –! However, less than two-thirds of          Memorize                       74        68        81          79       77        63
            online consumers say they ONLY
            memorize their passwords.                   Memorize only                61        57        68          60       66        45
         –! Americans are least likely to only
                                                      Write down                     18        18        17          10       14        36
            memorize their passwords with no
            other assistance.                         Websites “remember”            15        13        9           20       14        20
  •! Writing passwords down or storing
     them with websites are also                      Stored in a computer
                                                                                     11        13        6           11        8        14
                                                      document
     frequently used password
     management practices.                            On a post-it                    3         4        3            3        1        2
         –!    Americans are most likely to write
               down their passwords (36%).            In mobile phone/PDA             2         8        4            5        4        NA

  •! Only a few take advantage of                     In address book/
                                                                                     11         9        4           12        7        NA
     technology by using password                     planner
     managers or mobile phones/PDAs.                  Other                           3         4        2            2        6        7

                                                                     [Multiple response]             Top third of responses
                                                                                                                    Middle third
                                                                                                                    Lower third

Q9. How do you keep track of your online passwords?                                Base (all)=1,000 per country


                                                                                     Confidential and Proprietary                  35
While most consumers memorize their passwords, many
   rely on their computers for help

  •! Less than half of these online
     consumers use their computers to
     help them remember passwords by
     storing them in the browser or
     computer.
         –! Online consumers who report
            memorizing passwords are less
            likely to rely their computer.
         –! Consumers who only memorize
            passwords are even less likely to
            rely on their computers for
            password recall.
         –! German and British online
            consumers are the least likely
            nationalities to rely on their
            computers for password help.




Q12. Do you have your computer or internet browser save your passwords?   Base (all)=1,000 per country


                                                                            Confidential and Proprietary   36
Important dates, family member or pet names are the most
   commonly used passwords

  •! Almost half of online consumers use
     important family dates, family                                                               CA       DE         ES          FR      UK    US
     member names or nicknames or pet’s
                                                                    Important dates               15        18        21          32      20    19
     names as their password.
         –!    Name and date usage is highest in                    Family name or
                                                                                                  22        20        14          31      22    24
               France where 53% use personal                        nickname
               information as their password.                       Pet’s name                    21        13        15          17      18    20
  •! Use of “secure” passwords like
     random numbers, alphanumeric                                   Random                        10         7         9          9       16    17
     sequences or made up terms is much
                                                                    Phone number                  10         6         9          5       9         6
     lower among these online consumers.
         –!    Germans (27%) and Americans                          Address                        7         5         5          6       8         6
               (24%) are most likely to use the
               more secure passwords.                               Social Security #              3         3         6          4       3         5

                                                                    (vol) Alphanumberics           7         7         4          3       4         7

                                                                    (vol) Locations                1         4         1          4       3         2
                                                                    Other                         30        24        30          29      29    24

                                                                                 [Multiple response]             Top third of responses
                                                                                                                           Middle third
                                                                                                                            Lower third

Q10. What do you most often use to create your account passwords?                                Base (all)=1,000 per country


                                                                                                   Confidential and Proprietary                37
Online consumers are not reluctant to share personal
   information on social network sites…

  •! Over 4 in 10 online consumers use                                                                               CA       DE        ES         FR    UK        US
     social networking sites.
          –!    Social networking sites are                                           Use social networking           49       40        34        45    48        41
                particularly popular in Canada
                (49%), Britain (48%) and France                                        Birth dates                    54       72        71        83    44        46
                (45%); and among consumers                                             Messages from friends
                younger than 45.                                                                                      73       19        50        33    71        68
                                                                                       and family
  •! Among social network users, the
                                                                                       Interests & hobbies            46       47        60        51    49        66
     most popular posted information are
     birth dates, followed by messages                                                 Video clips                    12        2        20        11    10        17
     from friends and family and
     information about hobbies and                                                     Embarrassing pictures          16        3        7         6     31        17
     interests.
                                                                                       Pet’s name                     12        2        10        6      6        15
          –! Continental Europeans are most
             likely to post birthday information                                       Children’s name                12        2        8         6      6        12
             (and other personal information like
             phone numbers and addresses).                                             Phone number                   10       41        9         22     9        7
          –! English speaking countries are more
             likely to use social networking sites                                     Address                        4        30        12        19     2        4
             to exchange information with
                                                                                       Other                          5         8        7         6      8        8
             friends and talk about interests.
                                                                                                                      [Multiple response]
Q35. Do you use social networking sites like MySpace, Facebook or Youtube?
Q36. Which of the following do you display on social networking sites like MySpace,                               Base (use social networking)
Facebook, YouTube, etc.?                                                                             N=CA: 491, DE: 397, ES: 341, FR: 454: UK: 480, US: 408


                                                                                                                    Confidential and Proprietary              38
…And some are risking exposing the information they use
for online passwords

•! Among online consumers who use
   social networking sites, one in six
   (one in fifteen of all online
   consumers) are at risk of exposing
   their passwords by sharing the same                                    CA       DE          ES       FR    UK         US
   sorts of information on their
                                            Use social networking          49       40         34       45    48         40
   networking sites.
   –! French social network users run the    Potential exposed
                                                                           14       15         19       31    14         20
      greatest risk of exposure (31%)        password information
      primarily because of the large         Birth date info
      number who use birthdates as                                         8        12         16       26     9         10
                                             exposed
      passwords and publish their
      birthdates online (26%).               Pet’s name exposed            4         1         3        1      3         5
   –! British, Canadian and German           Family member name
      social networking users are the                                      3         1         2        2      3         5
                                             exposed
      most circumspect with the
                                             Phone number
      information they publish.              exposed
                                                                           --        1         --       1      1         1

                                             Address exposed               --        1         1        1      --        --

                                                                     Top third of responses
                                                                                Middle third
                                                                                Lower third
                                                                       Base (use social networking)
                                                          N=CA: 491, DE: 397, ES: 341, FR: 454: UK: 480, US: 408


                                                                         Confidential and Proprietary               39
Most online consumers are reluctant to share password
   information with their families

  •! A majority of online consumers say
     they do not share password
     information with their families.
         –! German online shoppers are the
            most private with their information;
            only 28% have ever shared
            password information with
            relatives.
         –! Americans are the most trusting,
            almost 6 in 10 have at some point
            shared password information.
         –! Men are least likely to share
            passwords.
         –! Families with children tend to be
            the most likely to share password
            information.




Q13. Have you ever shared your passwords with a significant other/family member?   Base (all)=1,000 per country


                                                                                     Confidential and Proprietary   40
Detailed Findings
Personal Information Safety Habits




                                 Confidential and Proprietary   41
Most consumers still receive paper financial statements

  •! A large majority of online consumers
     still receive financial statements from
     their banks and credit card
     companies in paper form.
  •! About one third of these online
     consumers (excluding the US) receive
     their statements online. Fewer than
     one in five receives electronic
     statements only.
          –! France is the most resistant to
             online statements with only 26%
             receiving electronic statements.
          –! British consumers have the highest
             number receiving only electronic
             statements (19%).




Q19. Do you get financial statements from your bank or credit card company?
(Yes, I receive a paper copy; Yes, I receive an electronic copy via email; No)
*[US asked only: paper financial statements]                                     Base (all)=1,000 per country


                                                                                   Confidential and Proprietary   42
Most who receive paper statements file them away

  •! Over half of online consumers who
     still receive a paper copy of their
     financial statements file them away in
     a file cabinet.
         –! Victims of identity theft are more
            likely to use a secured location, like                            CA       DE        ES          FR   UK    US
            a safe or locked cabinet.
         –! Consumers concerned about ID             File cabinet             54        58         53        60   49        55
            theft are also more likely to use a
                                                     Locked cabinet or
            secured storage location.                                         17        16         9         7    21        23
                                                     safe
         –! Online consumers who frequently
            change their passwords extend            Drawer or box            15        15         14        21   18        15
            their caution to the real-world; they
            are more likely than other to use        On my desk                6         2         13        5    2         3
            locked cabinets or safes.
                                                     At work                   2         4         3         4    1     NA

                                                     Other                     5         5         8         3    7         4

                                                                          Top third of responses
                                                                                    Middle third
                                                                                     Lower third



                                                                          Base (keep financial statements)
Q21. Where do you keep your financial statements?              N=CA: 721, DE: 674, ES: 727, FR: 855: UK: 771, US:591


                                                                              Confidential and Proprietary             43
Shredder use is concentrated in English speaking
   countries

  •! Most consumers in Canada, the UK
     and the US use shredders to dispose
     of financial statements. A large
     number of German consumers also
     use shredders.
          –!    Shredder use is most popular                                                                      CA        DE         ES        FR   UK        US
                among consumers 45 and older,
                                                                                     Put in shredder              58        49         14        16   64        67
                frequent password changers and
                victims of ID theft .                                                Tear up and throw away       22        31         65        49   15        21
  •! Most French and Spanish consumers
     tear their statements up before                                                 Use shredding service         9         5         7         3    11        8
     throwing them away and the French
                                                                                     Throw away                    3         2         4         6    1         3
     would also use them as fire kindling.
          –!    Consumers under 45 are the most                                      Recycle                       3         3         5         5    1         1
                content with just tearing up their
                statements.                                                          Use as kindling               6        10         5         21   7         NA

                                                                                                              Top third of responses
                                                                                                                        Middle third
                                                                                                                         Lower third




Q22. When you throw away your financial statements, how do you typically dispose of them?                      Base (all)=1,000 per country


                                                                                                                  Confidential and Proprietary             44
Most English speaking and German consumers own
   shredders

  •! Paper shredder ownership echoes the
     usage rates seen in the last chart.
     Consumers in the US and UK are
     most likely to own a shredder,
     followed by Canadians and Germans.
         –!    Shredder ownership follows use.
               Consumers 45+ , ID theft victims,
               frequent password changers are all
               more likely to own shredders.
  •! French and Spanish consumers are
     not likely to own shredders.




Q23. Do you own a paper shredder?                   Base (all)=1,000 per country


                                                      Confidential and Proprietary   45
Shredders are used on financial information

  •! Consumers who own paper shredders
     use it mostly to dispose of their
     financial information.
          –! English speaking countries in                                        CA       DE        ES          FR   UK    US
             particular are likely to shred
                                                    Financial statements          88        85       73          78   90        88
             financial statements, credit card
             application, bills and anything else   Credit card
             containing their personal financial                                  72        57       44          43   68        78
                                                    applications
             information.
                                                    Other bills                   78        64       57          46   80        77
          –! Continental Europeans shred
             financial statements, but are less     Mortgage or loan
                                                                                  56        56       38          36   65        61
             militant about destroying every        statements
             piece of paper with their
             information.                           Receipts                      61        46       52          45   67        52

  •! Only the French admit to a marginally          Things I want to hide
                                                                                  22        22       27          40   26        16
     high level of shredder use on items            from my family
     they wish to hide from family or loved         Other                         10        14       14          11   16        2
     ones.
          –!    Frequent shoppers and consumers                                    [Multiple response]
                under 45 are most likely to use                               Top third of responses
                their shredder to hide things.
                                                                                        Middle third
                                                                                         Lower third

                                                                                   Base (own shredder)
Q24. What do you typically put in the shredder?
                                                                   N= CA:667, DE: 532, ES: 226, FR: 168: UK: 768, US:768


                                                                                  Confidential and Proprietary             46
Online consumers say blank checks and responding to
   spam are the most risky behaviors

  •! Online consumers in English speaking
     countries are divided between the
     risks inherent in responding to spam                                                  CA       DE        ES           FR   UK   US
     and writing a blank check.
                                                              Purchasing something
          –!    Identity theft victims tend to say            from an unsolicited          36        23       17           22   38    37
                that responding to spam is slightly           email
                riskier than leaving a blank check.
  •! Continental European consumers are                       Writing a blank check        34        42       53           43   28    32
     much more likely to say that blank                       Leaving your credit
     checks are the riskier behavior.                         card at a restaurant or      13        18       10           16   21    16
  •! British consumers also view leaving                      bar
     your credit card at a restaurant as                      Carrying $1,000 cash          6        5        10           8    6     7
     risky.
                                                              Purchasing something
                                                              from an unfamiliar            8        6         7           9    4     5
                                                              online vendor
                                                              Loaning your credit
                                                                                            4        6         3           2    4     4
                                                              card to a friend

                                                                                        Top third of responses
                                                                                                   Middle third
                                                                                                   Lower third


Q27. Which of the following do you think is the most risky?                         Base (all)=1,000 per country


                                                                                            Confidential and Proprietary             47
Consumers say they are most likely to carry a large
   amount of cash or shop at an unfamiliar online vendor

  •! Online consumers say they are most
     likely to engage in what is seen as
     the least risky activities of the options
     offered: carrying large amounts of                                                          CA        DE          ES       FR   UK        US
     cash or shopping at an unfamiliar
                                                                     Purchasing something
     online vendor.
                                                                     from an unsolicited          3         3          3        4    2         2
  •! A significant number of Spanish and                             email
     Canadian consumers choose leaving
                                                                     Writing a blank check        3         2          2        6    2         3
     their credit cards at a bar or
     restaurant as less risky.                                       Leaving your credit
                                                                     card at a restaurant or      22        7          22       10   15        19
                                                                     bar

                                                                     Carrying $1,000 cash         35       51          28       37   38        25

                                                                     Purchasing something
                                                                     from an unfamiliar           26       26          29       19   38        38
                                                                     online vendor
                                                                     Loaning your credit
                                                                                                  10       12          15       29   6         14
                                                                     card to a friend

                                                                                             Top third of responses
                                                                                                       Middle third
                                                                                                        Lower third

Q28. And which of these activities would you be most likely to do?                      Base (all)=1,000 per country


                                                                                                 Confidential and Proprietary             48
Most consumers refuse to give information to unsolicited
   vendors

  •! A large majority of online consumers
     say they have never given their credit
     card information to an unsolicited
     vendor, including email, door-to-door
     salesmen or telemarketers.
          –! Canadians are most likely to give
             credit info to unsolicited vendors.
          –! Identity theft victims are also more
             likely to have given out their credit
             card info (perhaps leading to the
             theft!)




Q29. Have you ever given your credit card information to purchase from a retailer who contacted you
either from an email, someone going door-to-door, or a telephone sales call?                          Base (all)=1,000 per country


                                                                                                              Confidential and Proprietary   49
Appendix




           Confidential and Proprietary   50
Demographics
                                CA    DE    ES    FR              UK             US
            Male                53%   56%   57%   51%            50%             48%
Gender
            Female              47%   44%   43%   49%            50%             52%
            18 to 24 years      3%    5%    14%   5%              4%             8%
            25 to 34 years      35%   29%   45%   39%            37%             29%
Age         35 to 44 years      23%   28%   27%   23%            26%             23%
            45 to 54 years      21%   20%   10%   17%            19%             22%
            55 or older         17%   18%   4%    17%            15%             19%
Online Usage

                               CA    DE    ES    FR              UK             US
             PayPal user       44%   36%   50%   36%            66%             55%
PayPal Use
             PayPal non-user   56%   64%   50%   64%            34%             45%
             Weekly & daily    21%   26%   9%    16%            41%             34%
Online
Shopping     Monthly           60%   65%   59%   67%            55%             55%
Frequency
             Yearly            19%   10%   33%   16%             5%             11%
Canada Special

  •! Canadian online shoppers are more
     likely to choose to shop at Canadian
     (93%) online retailers than American
     ones (85%), but just barely.
          –!    Men (88%) and younger consumers
                (88%) are more likely to shop at an
                American retailer.
  •! Canadian retailers biggest attraction,
     relative to US retailers, is the
     absence of shipping, custom or
     brokerage fees (67%).
          –!    Price in Canadian dollars (55%) and
                supporting the Canadian economy
                (45%) are also important.
  •! The main attraction of US retailers is
     when a product is not available in
     Canada (74%).
          –!    Getting a good price is also
                important (64%).


Q37a. How likely are you to choose to shop online at a Canadian online retailer?
Q37b. How likely are you to shop online at a United States online retailer?
Q37c. What are your main reasons for shopping at a Canadian site instead of an United States site?
Q37d. What are the main reasons for shopping at an United States site instead of a Canadian site?    Base (CA)=1,000


                                                                                                       Confidential and Proprietary   53
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