Who do consumers trust more for Payments: Banks or PayPal?

by Erin McCune on October 29, 2008

in Payments News

[via Bank Technology News]

To_Trust_Or_Not_to_Trust

[excerpt] Both studies were conducted in August 2008 and released within days of
each other in late September — before a string of disastrous financial
firsts in October clearly eroded consumers' trust in banks. Both
companies surveyed consumers who are comfortable online, but the
surveys differed in size, audience composition and, perhaps most
important, how they worded their trust-related queries. And while the
CashEdge survey of 450 online banking customers was conducted via
online survey tool Zoomerang (San Francisco), Cisco had its own
research unit survey 1,500 broadband users who do not necessarily bank
online.

The studies did not ask exactly the same question. CashEdge arguably
worded its question in a way that favored banks, by emphasizing the
current inconvenience of using a nonbank payment service, such as
PayPal, that requires a separately funded account in addition to one's
checking account: "Assume that your current bank offered a service
similar to PayPal. … [Assume] all of your money flowed directly into
and out of your bank account such that you did not have to manage a
separate PayPal account. Would you use this bank service?"

On the other hand, Cisco asked consumers directly to rate their
trust in banks and nonbanks on a five-point scale, ranging from
"distrust very much" to "trust very much." And whereas CashEdge
referred only to PayPal, Cisco named a wide range of possible nonbank
payment providers when polling consumers, including PayPal,
BillMeLater, Google Checkout, Amazon Payments, TextBuyIt, eBillMe,
Revolution and Obopay.

Read more here.

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