Croats Embrace the Digital Economy, but Fear for Privacy and Security

Citizens of Croatia are open to all the advantages of the digital economy – from online banking to shopping via mobile devices, but they are also aware of all the risks it brings and are ready to protect their personal data.

Additionally, citizens are turning to the internet and the digital economy seeking advantages over the traditional economy. They inform themselves about what is offered and ultimately make decisions based on criteria of availability, speed, better offers, and service security. This is the conclusion of a study on trust in the digital economy conducted on nearly 6,800 respondents by Perpetuum Mobile and its partners, PBZCard, Symantec, and the magazine BUG.

The digital economy is a new form of economy based on digital technologies that have long since gone beyond the realm of “informatics.” They have become an indispensable element of life and work in modern times, and for the economy, they represent one of the most attractive growth opportunities.

Croatia and its citizens have been adopting, using, and developing various skills and products that create the digital economy for several years now. With the expansion of digital into all spheres of society, the traditional economy is transforming into a digital economy.

According to the recently published “The Digital Economy & Society Index (DESI),” 47 percent of the population in Croatia uses online banking services. This coincides with data collected in the study on trust in the digital economy, where 46.5 percent of respondents stated that they use online banking services. However, compared to the European Union, where 57 percent of the population uses online banking, we are still below the average. Interestingly, however, even a quarter (26 percent) of Croatian citizens use mobile banking. For comparison, the EU average is 33 percent.

Although according to DESI data, only 44 percent of Croats shop online, this study shows somewhat different data, closer to the European average of 65 percent. Thus, more than three-quarters (78.1 percent) have shopped online more than 5 times in the past year. In most cases (84.3 percent), this involved purchasing various products such as books, white goods, and software. A high proportion (76.6 percent) of citizens have paid bills via the internet or mobile phone, while other activities such as purchasing services (47 percent), tickets for music or cultural events (43.5 percent), and eCitizen and eMail services (38.9 percent) were performed to a somewhat lesser extent. Although during online shopping, the majority of respondents (75.6 percent) use credit cards and (72.7 percent) PayPal, it is interesting to note that just over one percent also use the virtual currency Bitcoin.

Croatian citizens, although they enjoy shopping online, are quite cautious when it comes to their personal data. Thus, 89 percent of respondents leave their credit card information only if sellers have security certificates and other mechanisms to protect their private data. However, it should also be noted that 7.3 percent of respondents do not leave their credit card information with anyone, regardless of certificates and protection mechanisms.

Online and mobile banking is widespread among Croatian citizens primarily due to accessibility (71.8 percent), while one-fifth simply does not want (or does not have time) to go to a bank branch to conduct their transactions.

In this regard, the most commonly used service is bill payment (92.3 percent) and checking account balances (79.7 percent). It should not be overlooked that even a third of respondents purchase mobile phone vouchers via e-banking or m-banking. Interestingly, among the 3.6 percent of respondents who do not use online or mobile banking, the main reason for this is fear. Namely, nearly two-thirds (59.1 percent) indicated that they are not sure that such a way of doing business is safe, while 17.8 percent of respondents see no advantage in using such a service.

That mobile phones have become an indispensable part of everyday life is best demonstrated by the fact that Croatian citizens are willing to use them as a means of shopping. More than half of them (54.7 percent) have some shopping app installed on their smartphones.

Mobile phones are most often used for paying parking or travel tickets (56.8 percent) and products (31.3 percent) and services (14.2 percent) in online stores. In this regard, the most commonly used payment mechanism is the mobile phone bill with the mobile operator (35.6 percent) and manually entering credit card information (29.1 percent).

Given that more and more shopping centers around the world are using the possibility of personalized offers to visitors through specialized apps, we were curious whether citizens would be willing to allow stores or companies to track their movements in order to offer them special services. More than half of the respondents (52 percent) rejected such a possibility, while 40 percent would consider it if the offer were good enough.

On the other hand, personal data for respondents is a category they do not want to put into commercial use. Thus, only a quarter (24.9 percent) of respondents would be willing to share some personal data to receive better offers, while nearly half of them (46.9 percent) would consider it if the offer were attractive enough.

That Croatian citizens take cyber threats seriously is also shown by data on how they protect their data on computers and mobile phones. As many as 85.5 percent of respondents have antivirus software installed on their computers, and half of them (50.4 percent) also use a firewall for additional security. On the other hand, when it comes to their mobile phones, they are somewhat “more relaxed.” Only a third (32 percent) have antivirus software installed on their computers, while half (50.6 percent) protect their data and access to their mobile phones with a PIN.

Respondents are quite satisfied with the level of protection of their data when conducting business online. Namely, 43.9 percent rated security as very good, and 18.2 percent as excellent. The situation is similar when paying with m-banking in stores, where 32.2 percent of respondents rate security as very good or excellent (16.8 percent).

Croatian citizens, according to all indications, take the instructions for safe online shopping seriously. Thus, three-quarters of them (77.4 percent) use only verified sites of large sellers for shopping, and a third (32.9 percent) even check the security certificates that the site uses. An interesting fact is that a third (27.9 percent) in doubt asks friends for advice.

In addition to security, citizens are most concerned that they will not be satisfied with what they purchased (37.6 percent) or that they will not receive what they selected (27.5 percent), while only one-fifth (22.4 percent) worry that someone might empty their bank account.

For this reason, two-thirds (68.4 percent) do not store any sensitive data such as PINs, passwords, card numbers, etc., on their computers. Additionally, 28.2 percent have a special card with limited funds that they use only for online shopping. The majority of respondents (99 percent) research what they want and how they want to buy before making a purchase. Two-thirds of them (73.8 percent) use both a computer and a mobile phone to find the desired information. An interesting (and expected) piece of advice that respondents offered to sellers to encourage them to use their services more often – offer lower prices (43.1 percent), convince me that it is safe (29.5 percent), provide services that are not available anywhere else (19.6 percent).

Croatian SMEs want to do business online, especially to reach customers abroad. However, it is interesting that Croatian companies are at or even above the EU average when it comes to introducing elements of the digital economy into their business. Thus, 10% issue e-invoices, 15% use cloud computing, and nearly one-fifth of SMEs sell online (EU average 16%). That Croatian citizens love shopping at domestic online stores is also shown by the results of this research. As many as three-quarters (75.4 percent) of respondents stated that they shop at domestic online stores. In 90 percent of cases, before making a purchase decision, they compare prices with other domestic online retailers.

When paying, a third (29 percent) of respondents choose installment card payments, just over a quarter (28.2 percent) pay with cards in one payment, while nearly a quarter (23.8 percent) opt for cash on delivery. When asked why they chose this method of payment, respondents answered in 30 percent of cases – due to security, and then due to the possibility of deferring payment through installment payments (27 percent).

They most often opt for installment payments for amounts greater than 500 (27.6 percent) or 1000 (25.3 percent) kuna. However, nearly half of the respondents would give up installment payments if they had to pay a fee for this service (48.4 percent). On the other hand, 44 percent would agree to pay a fee, but depending on the amount of the fee. Domestic online retailers are most criticized for having prices that are the same as in traditional stores (44.6 percent), for high delivery costs (42.1 percent), and for not offering any additional benefits for online shopping (29.6 percent).

Finally, it should be mentioned that the respondents were predominantly male (55.2 percent), aged 36 to 45 years (28.6 percent), university educated (38.6 percent), and living in larger towns (51.7 percent). They are permanently employed (68.4 percent) and come from various industries.

-The research shows that Croatian society is divided in half. Approximately 50% of the population is ready to use all the advantages of the digital economy. Users of the digital economy know what they want, so they expect digital service providers to be cheaper, faster, more accessible, and more innovative, which is not always possible to achieve in such a small country and with the legislative framework we have – commented the results of the research Aron Paulić from BUG.

Mislav Blažić, CEO of PBZ Card, also considers the results of this research to be very interesting. – As a leader in introducing new technologies and products into card business, such research is very valuable to us, and that is precisely why we decided to support this project of our partner. Many of our services, such as the new PBZ Wave2Pay contactless payment service using modern HCE technology, represent a significant step towards strengthening electronic payment transactions and technologically sophisticated services, such as mobile payments, and a stronger development of a cashless society. In the acceptance and consideration of such types of payments and digital technologies, our market and our users, as this research confirms, show good development and interest, which gives us as a card institution that supports all types of payments space for further improvement of digital payment services – says Blažić. The CEO of Perpetuum Mobile, Blerim Sela, believes that the results of the research show that Croatia is still lagging behind European and global trends. – However, it is also clear that citizens understand all the advantages of the digital economy. If we want to increase these trends, it is necessary to digitalize not only companies but also public institutions and state bodies. Croatian companies, such as Perpetuum Mobile, can offer good solutions for digital business and thus provide citizens and other companies with an even better experience in the digital economy – concluded Sela.