Consumer Perceptions of Mobile and Traditional Point-of-Sale Credit/Debit Card Systems in the United States: A Survey

Abstract

IntroductionPoint-Of-Sale (POS) systems are used globally to accept payment from consumers using credit or debit cards to purchase goods or services. The most popular form of POS reader, especially in the United States (US), involves swiping a credit or debit card through a magnetic scanner (Smart Card Alliance, 2011). This traditional POS (TPOS) system requires a dedicated, standalone card reader deployed solely for the purpose of processing transactions using credit/debit cards. Such systems have been used for many years and most consumers are familiar with them.Recently, a new POS system was introduced to the market, the mobile POS (MPOS) system (Johnson, 2012). Manufactured by several venders, including Square®, Intuit GoPayment® and Paypal Here®, MPOS systems take two forms. One type, hardware-based MPOS systems, consists of a small reader that plugs into a mobile device such as a smart phone or tablet. Consumers swipe their credit/debit cards through the device to make a payment. Merchants typically use the mobile device not just to accept payments but also for various other personal or business purposes. Payments are processed through software apps stored on the device. The other type of MPOS system is software based and usually requires manual entry of card information onto the phone or tablet. In some cases, the merchant can photograph the credit/debit card instead of entering data found on the card (www.card.io).A large body of research suggests consumers may have anxiety, fear, or concern about their personal safety and security when using new technology, especially when they are sharing personal or secure information such as credit or debit card numbers using that technology (Liu, 2012; Meuter et al., 2003; Perea y Monsuwe, Dellaert, & de Ruyter, 2004). Such anxiety was reported by consumers, for example, when making Internet-based credit card purchases a decade ago (Perea y Monsuwe et al, 2004) and more recently in using self-service bank machines (Liu, 2012). Given recent mass media publicity about cyber-crime and the potential for personal data to be stolen electronically (e.g., Whitaker, 2014), MPOS systems may introduce particular concern about crime victimization among consumers for several reasons. These include: (a) the electronic devices are used for multiple purposes by merchants, including personal matters, which may introduce greater risk of consumer information being stolen or misused; (b) they are small, mobile devices connected wirelessly and often insecurely to the Internet, which may raise fear of ready access by criminals to personal information; (c) third-party apps are both easily and typically stored on MPOS host devices and may contain malware; and (d) credit card theft has been featured prominently by national US media outlets in recent years.Given the rapid increase recently in the use of MPOS systems, the potential for high levels of consumer anxiety about crime victimization while using them based on research with similar technologies, and the dearth of empirical research on consumer anxiety about crime and personal security surrounding MPOS systems and the implications of that anxiety for industry, this study was designed to evaluate consumer fear, anxiety, and discomfort using MPOS devices at local merchants. Specifically, we tested four hypotheses: (a) consumers will generally feel comfortable using either MPOS or TPOS systems, but (b) consumers will report less concern using TPOS systems than with using MPOS systems; (c) consumers will report greater trust in TPOS systems over MPOS systems; and (d) consumers will find TPOS systems as convenient as MPOS systems. To test these hypotheses, we conducted a clustered case vs. control survey research study. Consumers making purchases at two small businesses, an ice cream shop that used a TPOS reader and a sandwich shop that used an MPOS reader, were surveyed.MethodsResearch SitesStudy sites were selected to meet the following criteria: (a) large and diverse consumer population, (b) high levels of consumer traffic during peak hours, (c) located geographically (