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

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Abstract

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.

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Fig. 1

Adapted from Köster et al. [19]

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Notes

  1. Secure site seal, or SSL seal certification, certifies the actual technical security of the payment form, whereas the Trust seal or TLS certification, don´t always certify any technical security and rather certify the consumer relations of the company.

  2. The Issuing Bank is the Bank or Financial Institution which grants Credit or Debit cards to the consumer [32].

  3. Hacker is defined as someone who is able to subvert computer security to gain unauthorized access to data, and if doing so for malicious purposes source [38].

  4. Paypal provides funds transfers and acts as an e-wallet solution for consumers, with a global offer [20].

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Acknowledgements

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.

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Authors and Affiliations

  1. Nova School of Business and Economics, Universidade Nova de Lisboa, Campus de Campolide, 1099-032, Lisbon, Portugal

    Sofia Cardoso & Luis F. Martinez

Authors
  1. Sofia Cardoso
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  2. Luis F. Martinez
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Correspondence to Luis F. Martinez.

Appendix

Appendix

1.1 Experimental setup flowchart

1.2 Scenario introduction

For the next section of this questionnaire, you will be given a scenario regarding which some questions will be required answer.

Imagine that you are a book lover and that you currently have a special preference to read your books in an electronic format (Ebooks), rather than the hardcopy of a book. After some online browsing research, you have chosen Ebooks.pt to purchase the new Harry Potter and the Cursed Child novel. This product will be available for download immediately after the transaction is approved.

1.3 Scenarios on the experimental setup

Experimental setup, shopping cart

First experimental setup: low reputation payment provider, with logos

Third experimental setup: good reputation payment provider, with logos

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Cardoso, S., Martinez, L.F. Online payments strategy: how third-party internet seals of approval and payment provider reputation influence the Millennials’ online transactions. Electron Commer Res 19, 189–209 (2019). https://doi.org/10.1007/s10660-018-9295-x

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