The Model of Trust Factors in Paying through the Internet
Dr. Franc Bračun, Executive Director & Senior Lecturer, Branch Network
Branch Network, Abanka Vipa & Faculty of Organizational Sciences, University of Maribor, Slovenia

As electronic commerce is developing, execution of payment transactions is becoming increasingly important. It has been found that the main obstacle for electronic commerce development is fear related to safety of the financial transactions over the Internet. Such situation is more a consequence of people’s perception and not so much of inadequate security. One can assume that rational consumer enters into a transaction if he believes that he will actually get the goods or services he is about to pay for, or that something can be done if he dose not get what he paid for. Thus, as electronic commerce is developing, the confidence in the Internet payment system is becoming increasingly important. Therefore, a framework to provide a richer explanation of trust in the context of electronic commerce is in great need today.
Previous research has resulted in contradictory findings concerning the relationship between confidence and trust, and between trust and perceived risk. This work proposes a theoretical model that reconciles these unresolved contradictions by distinguishing between trust in three different levels: personal, interpersonal, and system level. Based on this, it is posited that perceived risk is intermediate between trust and confidence, and that trust and confidence do not work alone in the context of electronic commerce, but they need each other. Propositions derived from the conceptual model provide an agenda for empirical research.
This work employed cross-sectional survey methodology to examine the potential factors inducing different forms of trust in online buyers and sellers and the effects of trust. Findings indicate that the proposed model is able to explain and predict buyer and seller acceptance of the Internet payments substantially well. The results reveal that trust in third-party impresses both buyer and seller by increasing perceived security and perceived control. The results show that trust in wider meaning increases the level of security and reduces the level of risk perception, and consequently increases confidence in the Internet payments. The results also show that confidence in the Internet payments increases buyer and seller’s willingness to make an online payment. The dissertation concludes with a discussion of the implications of this work to both researchers and practitioners. In sum, trust is multidimensional and complex construct composed of combined bases of expectations, which are mediated by perceived risk and conditioned by preference structure of the trustor, i.e. risk propensity and propensity to trust.

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