Transient Customer Response to Data Breaches of Their Information.

The article examines consumer responses to unexpected cybersecurity data breaches in India, focusing primarily on a breach involving a leading online food delivery platform. Using detailed transaction-level data, the study finds that digital payments declined by about 9% relative to cash payments immediately after the breach, which exposed users’ names, email addresses, and passwords but not payment information; however, this effect was short-lived, with payment behaviors returning to prebreach levels within three months. Customer entry and exit rates showed minimal and transient changes, and users who predominantly used digital payments were less likely to quit the platform despite switching temporarily to cash payments. Additional analyses of breaches at an online grocery store and a national bank revealed even weaker consumer behavioral changes. Overall, the findings suggest that consumers recognize data breaches in the short term but ultimately prioritize the convenience of digital services over concerns about payment security risks, especially when breaches involve nonsensitive data.