Electronic Commerce Research

, Volume 19, Issue 1, pp 189–209 | Cite as

Online payments strategy: how third-party internet seals of approval and payment provider reputation influence the Millennials’ online transactions

  • Sofia Cardoso
  • Luis F. MartinezEmail author


With the recent increase in online purchases, organizations have been able to improve their capacity to collect, store and profit from personal and financial data gathering. Online purchases occur in an environment characterized by higher risk levels surrounding the transaction. Several payment strategies can be applied in order to mitigate the consumers’ perceived risk and increase trust levels. The present study intends to understand how the presence of internet seals of approval and the reputation of the payment provider impact consumer trust and online payment perceived risk. Four randomized experimental setups were used to manipulate the independent variables, on a sample size of 324 valid responses. The majority of participants were between 18 and 35 years old. The study results demonstrate that new online vendors could mitigate these variables by investing in a payment strategy that combines the presence of internet seals of approval logos together with the presence of payment providers with low reputation.


Consumer behavior Online transactions Payments strategy Reputation Digital marketing Millennials 



This work was funded by National Funds through FCT—Fundação para a Ciência e Tecnologia under the project Ref. UID/ECO/00124/2013 and by POR Lisboa under the project LISBOA-01-0145-FEDER-007722. We thank Jorge Velosa for his comments on an earlier version of this manuscript.


  1. 1.
    Adyen. (2015). The global e-commerce payments guide. San Francisco. Retrieved from
  2. 2.
    Benlian, A., Titah, R., & Hess, T. (2012). Differential effects of provider recommendations and consumer reviews in e-commerce transactions: An experimental study. Journal of Management Information Systems, 29(1), 237–272.Google Scholar
  3. 3.
    Bilgihan, A. (2016). Gen Y customer loyalty in online shopping: An integrated model of trust, user experience and branding. Computers in Human Behavior, 61, 103–113. Scholar
  4. 4.
    Butler, J. K., Jr. (1991). Toward understanding and measuring conditions of trust: Evolution of a conditions of trust inventory. Journal of Management, 17, 643–663.Google Scholar
  5. 5.
    Cases, A.-S. (2002). Perceived risk and risk-reduction strategies in Internet shopping. The International Review of Retail, Distribution and Consumer Research, 12(4), 375–394. Scholar
  6. 6.
    Chang, M. K., Cheung, W., & Tang, M. (2013). Building trust online: Interactions among trust building mechanisms. Information & Management, 50(7), 439–445. Scholar
  7. 7.
    Doney, P. M., & Cannon, J. P. (1997). An examination of the nature of trust in buyer–seller relationships. Journal of Marketing, 61(2), 35–51.Google Scholar
  8. 8.
    Featherman, M. S., & Pavlou, P. A. (2003). Predicting e-services adoption: A perceived risk facets perspective. International Journal of Human–Computer Studies, 59, 451–474.Google Scholar
  9. 9.
    Field, A. (2009). Discovering statistics using IBM SPSS statistics (3rd ed.). London: SAGE Publications.Google Scholar
  10. 10.
    Gefen, D., Karahanna, E., & Straub, D. W. (2003). Trust and TAM in online shopping: An integrated model. MIS Quarterly, 27(1), 51–90.Google Scholar
  11. 11.
    Gordon, L., & Lee, S. (1967). Economics for Consumers. New York: The American Book Company.Google Scholar
  12. 12.
    Ha, H. (2004). Factors influencing consumer perceptions of brand trust online. Journal of Product & Brand Management, 13(5), 329–342. Scholar
  13. 13.
    Head, M., & Hassanein, K. (2002). Trust in e-commerce: Evaluating the impact of third-party seals. Quarterly Journal of Electronic Commerce, 3(3), 307–325.Google Scholar
  14. 14.
    Holst, C. (2013). Which site seal do people trust the most? Retrieved from
  15. 15.
    Hong, I. B., & Cha, H. S. (2013). The mediating role of consumer trust in an online merchant in predicting purchase intention. International Journal of Information Management, 33(6), 927–939. Scholar
  16. 16.
    Hong, Z., & Yi, L. (2012). Research on the influence of perceived risk in consumer on-line purchasing decision. Physics Procedia, 24, 1304–1310. Scholar
  17. 17.
    Jarvenpaa, S. L., Tractinsky, N., & Vitale, M. (2000). Consumer trust in an internet store. Information Technology and Management, 1(2), 45–71.Google Scholar
  18. 18.
    Kimery, K. M., & McCord, M. (2002). Third-party assurances: Mapping the road to trust in e-retailing. Journal of Information Tecnhology Threory and Application, 4(2), 63–82.Google Scholar
  19. 19.
    Köster, A., Matt, C., & Hess, T. (2016). Carefully choose your (payment) partner: How payment provider reputation influences m-commerce transactions. Electronic Commerce Research and Applications, 15, 26–37. Scholar
  20. 20.
    Lees, A., & King, M. (2015). World payment Report. Capgemini Consulting and Royal Bank of Scotland. London. Retrieved from
  21. 21.
    Martinez, L. F., & Zeelenberg, M. (2015). Trust me (or not): Regret and disappointment in experimental economic games. Decision, 2(2), 118–126. Scholar
  22. 22.
    Mcknight, D. H., Kacmar, C. J., & Choudhury, V. (2004). Shifting factors and the ineffectiveness of third party assurance seals: A two-stage model of initial trust in a web business. Electronic Markets, 14(3), 252–266. Scholar
  23. 23.
    McKnight, D. H., Kacmar, C. J., & Choudhury, V. (2004). Dispositional trust and distrust distinctions in predicting high- and low-risk internet expert advice site perceptions. E-Service Journal, 3(2), 35–58. Scholar
  24. 24.
    Miyazaki, A. D., & Krishnamurthy, S. (2002). Internet seals of approval: effects on online privacy policies and consumer perceptions. Journal of Consumer Affairs, 36(1), 28–49. Scholar
  25. 25.
    Nicholas, A. J., & Lewis, J. K. (2008). Millennial attitudes toward books and e-Books. The International Journal of the Book, 5(2), 81–92. Scholar
  26. 26.
    Palmer, J. W., Bailey, J. P., & Faraj, S. (2000). The role of intermediaries in the development of trust on the WWW: The use and prominence of trusted third parties and privacy statements. Journal of Computer-Mediated Communication. Scholar
  27. 27.
    Parkinson, T. L. (1975). The role of seals and certifications of approval in consumer decision-making. Journal of Consumer Affairs, 9, 1–13. Scholar
  28. 28.
    Pappas, I. A., Kourouthanassis, P. E., Giannakos, M. N., & Chrissikopoulos, V. (2016). Explaining online shopping behavior with fsQCA: The role of cognitive and affective perceptions. Journal of Business Research, 69(2), 794–803. Scholar
  29. 29.
    Pavlou, P. A. (2003). Consumer acceptance of electronic commerce: integrating trust and risk with the technology acceptance model. International Journal of Electronic Commerce, 7(3), 69–103.Google Scholar
  30. 30.
    Pavlou, P. A., & Gefen, D. (2004). Building effective online marketplaces with institution-based trust. Information Systems Research, 15(1), 37–59.Google Scholar
  31. 31.
    Preibusch, S., Peetz, T., Acar, G., & Berendt, B. (2016). Shopping for privacy: Purchase details leaked to PayPal. Electronic Commerce Research and Applications, 15, 52–64. Scholar
  32. 32.
    Rajappa, K., Perumparambil, P., Baxley, D., PSV, V., Vergne, C., Sullivan, W., & Thakur, R. (2012). Global Trends in the Payment Card Industry 2013. Capgemini Consulting and Royal Bank of Scotland. Retrieved from
  33. 33.
    Schlosser, A. E., White, T. B., & Lloyd, S. M. (2006). Converting web site visitors into buyers: how web site investment increases consumer trusting beliefs and online purchase intentions. Journal of Marketing, 70(2), 133–148.Google Scholar
  34. 34.
    Schoorman, F. D., Mayer, R. C., & Davis, J. H. (2007). An integrative model of organizational trust: Past, present, and future. Academy of Management Review, 32(2), 344–354.Google Scholar
  35. 35.
    Schuh, S., & Stavins, J. (2015). The 2013 survey of consumer payment choice: Summary results. Federal Reserve Bank of Boston Research Data Reports, 15(4), 1–64.Google Scholar
  36. 36.
    Valentine, D. B., & Powers, T. L. (2013). Online product search and purchase behavior of generation Y. Atlantic Marketing Journal, 2(1), 76–91.Google Scholar
  37. 37.
    Vos, A., Marinagi, C., Trivellas, P., Eberhagen, N., Skourlas, C., & Giannakopoulos, G. (2014). Risk reduction strategies in online shopping: E-trust perspective. Procedia—Social and Behavioral Sciences, 147, 418–423. Scholar
  38. 38.
    Wikipedia. (2016). Hacker. Retrieved from

Copyright information

© Springer Science+Business Media, LLC, part of Springer Nature 2018

Authors and Affiliations

  1. 1.Nova School of Business and EconomicsUniversidade Nova de LisboaLisbonPortugal

Personalised recommendations