November 14, 2012 06:00 ET

Half of Online Retailers Accepting PayPal Call It a 'Necessary Evil,' Cite Security Risks

Online Retailers Struggle to Combine Shopper Convenience With Data Security When Accepting Alternative Payments and Social Logins, OneID Study Finds

REDWOOD CITY, CA--(Marketwire - Nov 14, 2012) - OneID, the first digital identity provider to eliminate the need for usernames and passwords, today announced findings from "Retail Trends Report: Customer Payments and Logins," a study commissioned by OneID to examine security, privacy and authentication challenges faced by online retailers. The survey, conducted by Osterman Research, found that online retailers are caught between trying to simplify the shopping experience and securing their networks, with few solutions available that can achieve both.

The survey of 165 senior technology influencers or C-level decision makers at e-commerce or mobile commerce outlets found that sites are expanding their use of alternative payment solutions, like PayPal and social logins. This comes even as they admit that currently these customer login and checkout methods present significant security risks and only two-thirds admit their sites are as secure as they could be.

"Even with alternative payments, social logins and all of today's innovative technologies, online retailers are still being forced into the age-old trade-off between usability and security," said Alex Doll, CEO of OneID.

Doll continued: "The 'password hack-a-day' trend we see in the news tells us that existing solutions are broken. Password-driven payment systems and social media logins are built on top of 50-year-old technology that continues to fail. Merchants deserve a solution that combines usability and security, while allowing consumers to be in control of their own digital identity."

Among the key findings from "Retail Trends Report: Customer Payments and Logins" are:

  • PayPal is a "necessary evil": While 84 percent of respondents offer PayPal for checkout, half -- 50 percent -- agreed that PayPal is a "necessary evil" and would replace it if they could. An equal number of respondents view PayPal as a security risk, while 47 percent called it a privacy risk. But at the same time, acceptance of PayPal is expected to increase approximately 14 percent in 2013.

  • Social logins represent retailer quandary: As with PayPal, respondents are adopting social logins even while security concerns linger. Among all respondents, more than two-thirds (68 percent) accept social logins on their sites even though 25 percent said they made security more difficult. Among the sites that do not accept social logins, 33 percent cited security concerns as a reason for not supporting them.

  • Shoppers are slow to adopt social logins: The vast majority of respondents (at least 70 percent) believe social logins make it easier for customers to access their sites, help increase customer purchases and give them a competitive advantage. However, 61 percent of sites that support social logins reported that less than 25 percent of their customers used them.

  • Email logins are on the way out: Online retailers report plans to drop email addresses as a login with just 64 percent saying they will be using them in 2013, down from 79 percent today. Of the respondents, 44 percent said email addresses as a login mechanism decrease security and 42 percent reported they make their sites difficult for mobile users.

  • Customer experience outweighs security, despite rising concerns: Nearly three-quarters of respondents (73 percent) reported that investing in technologies to improve the shopping experience would be necessary over the next 12 months, while just 69 percent rated highly their investments in customer security or data security. At the same time, half of online retailers queried said e-commerce security has gotten harder to ensure over the past 12 months, and 67 percent believe their sites are as secure as they could be.

The findings underscore how the increasing prevalence of alternative payments like PayPal and social media accounts for conducting transactions across the web is driving online retailers to make difficult decisions when it comes to protecting privacy and data. E-commerce and m-commerce operators have almost no real choices among existing solutions to ensure protection and privacy while delivering on convenience.

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About Us
OneID is the first digital identity provider to eliminate the need for usernames, passwords and site-specific accounts, making the online experience simpler and more secure. OneID makes online transactions as easy as one click by instantly recognizing individuals through their unique digital identity. OneID combines advanced, military-grade cryptography and a distributed cloud architecture to authenticate users through registered devices, like computers and smartphones. For businesses, OneID reduces fraud and eliminates the costs and risks associated with managing and securing customer accounts and data. Based in Redwood City, Calif., OneID was created by search engine Infoseek founder Steve Kirsch and is backed by Khosla Ventures and North Bridge Venture Partners. For more information or to create your OneID, visit

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