What do consumers value more, online security or convenience?

When Pat Alexander read about the Equifax data breach, the 58-year-old former computer programmer from Roseville was not surprised. She had seen enough in her 15 years of coding both mainframes and PCs to convince her that nothing online is totally secure. "Technology doesn't confound me. It just doesn't impress me," she explained.

The Equifax breach affected her personally. Being proactive, she was one of the few consumers who actually checked with the credit bureau to see if the information they held on her had been compromised. "Yup, I'm in it," she told me in an e-mail prompted by my Oct. 15 column on identity theft.

Realizing she was among the 143 million Americans whose Social Security numbers and other personal information were stolen, Alexander finally decided to move her bank account out of a national online bank to a local credit union. She said she is willing to take a slightly lower interest rate to have a real banker available in case something goes wrong. "It's harder to say no when someone is standing in front of you," she reasoned.

Alexander had already been moving her financial life increasingly off the internet, prompted by security concerns and the seemingly unending headlines about ever more daring data breaches. "I quit logging into my accounts via internet years ago. I only place one Roth IRA purchase a year by landline," she said, adding that she tracks her investments with pencil and paper. While she admits to shopping online and carries a couple of credit cards, she and her husband Scott share one cellphone and she goes to the public library when she wants to access the internet.

Alexander's offline stance toward most of her personal financial life illustrates a clear divide between online adopters and skeptics and is one of the largest challenges facing the retail and financial services industries hoping to persuade consumers to do more online.

One of the fastest growing consumer financial trends is the use of smartphones or other mobile devices to do tasks from buying coffee, donating to charities and trading stocks to depositing checks, shopping for shoes and passing money between friends. Still, less than half of all consumers with a bank account have taken the plunge into mobile payments, according to a Pew Research Center study released last year. Security concerns remain a major obstacle limiting industry growth as every data breach adds to consumers' skepticism. The Pew study reported that two-thirds of consumers who have not gone mobile cite the fear of identity theft as the main reason.

In a recent survey of more than 800 mostly North American merchants, half saw their mobile payments revenue grow more than 10 percent last year while 93 percent describe mobile payments as either "important" or "very important' for their future revenue. Support for mobile payments is nearly universal among merchants surveyed, who range in size from under $5 million to more than $500 million in annual revenue. The study, titled Mobile Payments & Fraud Survey, reported 78 percent of merchants now use mobile payments while almost all the rest (17 percent) plan to do so within the next two years.

Here is where the survey gets interesting. Conducted by a consortium of data security consultants, payment processing firms and the online news site CardNotPresent.com, the survey asked merchants whether they thought consumers valued security or convenience more when using mobile payments. Even though the Pew study found security concerns were the top impediment to consumer adoption, merchants were more than twice as likely to believe that consumers value ease of use over security (70 percent vs. 30 percent).

This divergence comes in part at least from the way the industry views consumers' actual behavior, lessons the industry has "learned … the hard way." According to the survey, more than half of consumers bail out in mid-transaction for whatever reason, as reported by 40 percent of merchants. This high "checkout abandonment rate," they believe, could be reduced if transactions were easier to complete. As a result, additional security features that slow down transactions are working against merchants' understanding of what motivates those consumers who have adopted mobile payments.

The move to mobile payments is most prevalent among millennials and GenX-ers, so Alexander is not the target demographic for the industry. She readily admits that she has sacrificed some conveniences, but the feeling of security is worth it to her. Her "get off the internet" stance has even raised eyebrows among friends and acquaintances.

But in an era of massive and seemingly unstoppable data breaches, she dismisses the promised convenience of managing her financial life online. "What am I going to do with the extra three seconds? Watch a cat video? I'll trade convenience for safety any day."

Brad Allen is a freelance journalist and former investor relations executive for companies including Imation Corp. and Cray Research. His e-mail is brad@bdallen.com.