Electronic Commerce Research

, Volume 16, Issue 1, pp 27–72

The role of risk in e-retailers’ adoption of payment methods: evidence for transition economies

Article
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Abstract

We use logit analysis to exploit a self-collected dataset on the payment and delivery options offered by the vast majority of B2C websites in five Central Asian transition economies. Specifically, we conduct a supply-side test of (elements of) the Transaction Context Model, which highlights the role of perceived risk. Our results confirm that e-retailers in sectors with higher average transaction values are more likely to adopt ‘pay in advance’ instruments—such as debit cards—that have a lower payment risk for the seller. We also find that merchants who offer higher-risk delivery options are more prone to also adopt higher-risk payment instruments (such as credit cards). Our control variables also yield interesting results. In particular, in line with the network externalities theory, we find evidence that the offline penetration of a payment instrument positively affects online merchant adoption.

Keywords

Online payment methods Transaction context Risk Delivery methods B2C e-commerce Transition economies 

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Copyright information

© Springer Science+Business Media New York 2015

Authors and Affiliations

  1. 1.Department of Applied Economics (APEC)Vrije Universiteit BrusselBrusselsBelgium
  2. 2.Department of BusinessWestminster International University in TashkentTashkentUzbekistan

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