With the introduction of internet and e-commerce many companies have been performing their business transactions through e portals such as C2B (Consumer to Business), B2C (Business to Consumer) etc. Increasing technology changes has bought tremendous changes in online business transactions and /or processes (buying and selling) and currently this process has become common. Currently E-commerce portals are playing a vital role in online business and here most consumers have varying opinions or views on online transactions especially security, privacy and trust.
Security and privacy are the two major aspects that drive online businesses which leads online consumers to develop trust on the e-portals. This ultimately increases the business processes. Keeping in view this as a major aspect this research investigates and discusses the varying consumer perceptions on privacy, security and trust in electronic commerce portals. AIMS AND OBJECTIVES This research aims at discussing varying consumer perceptions on privacy, security and trust on electronic commerce portals.
The intended aim is achieved through following objectives * Analyze consumer perceptions on varying characteristics of e-commerce portals * Examine the various factors that influence consumer trust and privacy on e-commerce portals * Identify the antecedents and consequences of online consumers privacy concerns * Examine how various security factors affect consumer perceptions towards e-commerce portal BACKGROUND OF THE STUDY The competition is on the increase in this highly advanced segment of marketing, both in number and intensity.
More number of websites or portals are offering their services/products with lot of value additions and better quality. Selling of the services or goods, groceries, clothes, music, travel, tickets, hardware, gifts, flowers, books are a part of the e-merchandise. Insurance, smart cards, debit cards, financial services, credit cards, internet banking, banking machines etc. , are a part of the e-finance products. If any website seriously intends for retention of it existing customers (in addition to attractive more number of new customers), hey need to incorporate in their marketing strategies the relationship paradigm (Hsu, Li-Chang & Wang, 2008; Walczack et. al, 2006). Internet Effects on Trade and Commerce Utilization of the internet has become one of the important marketing channels and medium. In this scenario, it is the responsibility of the Managers to efficiently manage the scarce marketing resources under the purview of the internet channels in order to improve the sustainable customer relationships.
Every business entity needs to focus on the customer’s perception of improving the security, in order to maintain long term relationship. This is an important aspect in view of the fact that the customers depend on the internet for gathering the information as well as for purchases online and become very loyal to the company or a particular brand of the product they are interested in (Bart et. al. , 2005). Web Site Designing – Crucial Concerns Designing of a website is one of the critical parts of internet marketing strategies as well in addressing the security concerns of the customers/consumers.
The characteristics that are generally emphasized in the website categories are navigation, privacy and security (or the trust). (Bart et. al. , 2005). A website needs to be viewed as a virtual store from the consumer’s standpoint and needs to gain customer’s trust in order to create a meaningful shopping experience. A consumer’s online interaction through the website can be co-related to the experience at a store in person. Naturally, consumers develop perceptions of trust basing on their website interaction and experience.
However, the trust of a consumer developed on the website depends on the extent of confidence on the security and safety of the portal. Only basing on these factors the consumer’s perceptions are formed either positive or otherwise. The level of satisfaction derived by a customer by a portal depends to a great extent on the authenticity and believability of the information offered by a portal (Bart et. al. , 2005). Privacy Vs Freedom of Information Every individual has a right to retain the information of their own tax, medical and other government related documents and this highly sensitive and ersonalized information is not revealed by the hospitals/doctors, financial institutions, business parties or the government agencies to irrelevant third parties. The Capitalistic societies are trading with the personal data as a saleable commodity (Jan, 2005), resulting in the privacy and free market policies being at odds with each other. Advanced data management technologies have resulted in sophisticated “Consumer database and management systems” which in turn has become a fast growing and highly profitable business activity by itself.
Data stored digitally has an indefinite span of life; because of which, consumers are apprehensive about their personal information being shared with unintended third parties (Warren & Brandies, 1890). In the present day context, the “rights to privacy” is directly conflicting with the “freedom or the right to information” being implemented by various democratic societies (Udo, 2001). Protection of the individual personal identifiable information is covered under the privacy. This is one of the major key drivers of online trust.
A person buying a system may not reveal so much of personal information as the one who is travelling or even commuting. Traveler has to identify self, place of residence, place of travel, date of travel and such other details which are of prime importance and need meant to be disclosed to everyone – specially those who are not relevant to the issue. Security relates to the information revealed online such as credit card, debit card or the other financial related information, used for purchase of goods and services (Hoffman, Novak & Tom, 1996; Peratla, 1999).
The need for online trust is very high for website categories which require presentation and navigation of information. The consumers may rely more on the brand strength of the product/ portal, while searching the websites. Advice is also one of the stronger determinants of online trust of website categories, for information on high search efforts. High involvement items are generally associated with the issue of order fulfillment conditions. Community features are very useful in trusting the information in cases where the expected sharing of the information in unknown circles is very high.
Consumers generally expect the website to be “error free” (such as incorrect processing of information or the site containing wrong information) since they do not accept information error on the websites as the information becomes the critical input for their decisions making (Hoffman, Novak & Tom, 1996; Peratla, 1999). Regulation – Sanctity of Online Privacy Statements Of late it has become customary on the part of every website to have a privacy statement displayed prominently. This has become compulsory in view of increasing consumer perception of their security and safety being at risk while transacting on the e-commerce portals.
In order to nullify the negative feelings of the consumers, privacy statements have been resorted to by the owners of various e-commerce web portals (Jan, 2005). Seldom, the privacy statements on the websites really try to protect the consumers from misutilization of their data and privacy. Mostly, they exhibit the same as per the regulatory requirements. There is lot of ambiguity in these privacy statement declarations, which are not clear in their terms and conditions and most of the time they are vague, unclear and highly confusing.
The consumers are really taken for a jolly good ride by these statements, which are prepared in the interest of the owners; not the consumers (Jan, 2005). The Efficacy of Privacy Statements Unfortunately, despite various regulatory authorities being in place, the companies are not legally obliged to protect the consumers in true sense. It is up-to the consumers themselves to protect their privacy by taking care and precaution while dealing with such e-commerce portals. The consumer is expected to read the privacy statement in detail and take a decision accordingly, whether or not to divulge the personal information through such web portals.
Obviously, consumers who are high users of internet services, while the occasional browsers of the internet will be taking high risk in dealing with the e-commerce portals. The high users of internet services have more awareness of privacy issues and hence will be very discrete in sharing their personal information with the web portals. (Miyazaki & Fernandez, 2000; Sheehan & Hoy; 2000). While participating in various online activities, consumers have always expressed their serious concern as regards their privacy aspects.
Various legislations have been made to improve the privacy levels of the consumers. Unfortunately, such legislations have been misused by the portals to their advance, for example Amazon. com had recently publicized their privacy police statement without any notice to the consumers. As per this policy, Amazon. com could use (trade with) the personal data of the consumers with out their consent. Every organization with internet presence, cannot deny the fact that the privacy is the key factor the success of online transactions (Miyazaki & Fernandez, 2000). Internet Seals of Approval
This is an effort by a group of companies having their online presence, to promote a third party seal of approval system in order to counter the efforts of legislation of privacy policies by various government authorities. Despite this seal of approval system being in force for couple of decades now, discussions are still inconclusive as regards – i) improving the online e-commerce portals’ privacy related practices that are acceptable to the consumers as per their expectations. ii) The extent of influence on consumer’s perceptions by such privacy policies and their implementation (Krishnamurthy & Sandeep, 2002).
The so called seal of approval has very little or negligible impact on the consumer perceptions on the believability; since the same has been carried out by an agency of the e-commerce portal management / owners and not by a government or legalized authority. It has been believed that it is not in the best interests of the consumers and it is only intended to help the e-commerce portals to improve their business revenues by way of trying to influence the consumers by giving a feeling of total privacy assurance.
Even after having failed to convince the consumers on a high note, the system of seal of approval is still continuing to be used in the market place of e-commerce portals (Krishnamurthy & Sandeep, 2002) Thus, this study tries to discuss and analyze the differentiating perceptions of consumers towards internet privacy, security that leads to trust on e portals. In this regard this research also looks for consumer perceptions towards e portals, key drivers of internet security, and characteristics of consumer perceptions and measures that can be used or implemented to reduce consumer perceptions on security.
Further this research intends to put forward the antecedents and consequences of online consumer privacy and few recommendations to overcome the increasing security related issues to e portals which could help the consumers to effectively use e-portals, and the portals to give efficient and effective services to their online consumers. Therefore the following sections give a clear picture of these aspects in the research. LITERATURE REVIEW E-commerce portals (B2B / B2C) Today business is done with many communication technologies such as mail order phone, mail order fax, walk-in retail and so on.
Web and internet are said to be another medium of communication (Vark, 1997). With the increasing demands of online customers the need of scalable, fast, accurate and secured information exchange is very important. This creates trust in online consumers. E-commerce is generally defined as a means for transactions of goods and services through internet (some of these could be B2B, B2C etc. ). E-commerce creates an indirect access of the business products and services to the customers who intend to buy just sitting at one place.
This can be said as a more relaxed way of shopping (Akther, 2004). E-portals provide a wide range of products and services and if any customers intend to buy through moving for shopping they have to move to different locations to get the same, so e-portals can be said as “one sit shopping”. Security in e-commerce portals Security is defined as the protection of data against accidental or intentional disclosure to unauthorized persons, or unauthorized modification or destruction (Udo, 2001).
Security is also defined as the protection of data against accidental or intentional disclosure to unauthorized persons, or unauthorized modifications or destruction. Privacy refers to the rights of individuals and organizations to determine for themselves when, how, and to what extent information about them is to be transmitted to others (Udo, 2001). According to Hsu, Li-Chang & Wang (2008); Mc. Knight et. al. (2002) security is one of the major and important factors of this relationship marketing.
For a successful business relationship, security is generally is considered as the crucial component in the relationship marketing paradigm. Security is a mutual detriment of behavior and an indication of confidence in the exchange partner’s integrity and its reliability. The importance of consumer perceptions on security in e- portals has been stressed by many researchers and practitioners keeping in view different perspectives such as social, economic, institutional, ethical, organizational, managerial, and technological approaches (Chang et al. 2005, Moon, Gefen and Straub 2004), while Jarvenpaa et al. (1999) and (2000) in their preceding studies have suggested importance of consumer perceptions on security with respect to internet sites (online websites) and comparatively some other studies were also investigated importance of B2B on consumer buying behaviors and their varying expectations (Akhter et. al. , n. d). According to Miyazaki & Fernandez (2000) online consumers purchasing behavior is affected due to concerns related to security.
Due to low consumer trust these concerns may raise high risk concerns or low buying behavior. It is viewed (Akhter et. al. , n. d) that based on the experience online consumer consciously or subconsciously analyze the security levels provided online and decide to continue transactions with that particular business (company) or move to another. Technical and non technical barriers in e-commerce have been discussed by Akhter (2004 & 2006), Tassabehji (2003) and Turban et al. , (2000) which are considered as barriers of online growth and development.
Some of the barriers are said as lack of security and reliability, standard technologies for secure payment and proven online business models. Security is a major concern to vendors in B2C as this reflects the consumer perceptions towards that business. As there is uncertainty and due to many complications present in e-commerce online consumers think of whether their financial information such as credit card are safe to send to a vendor through internet (Akhter, 2006) and due to this most consumers fear to provide their credit card information on internet to do any transaction.
According to an argument done by Akhter (2004), online consumer trust can be increased if e commerce or e portals can create a positive opinion on the system that it is trustworthy and secure. Key Drivers of Online Trust Trust is a fundamental principal of every business relationship. Trust is the critical factor in stimulating purchase over internet (Corbit et. al. , 2003). Most internet marketing sites lack trust of consumer either in merchant honesty or competency. Thus trust plays a vital role on online consumer activities there by leading to ecommerce success (Corbit et. al. , 2003).
Trust is said to be characterized by uncertainty, reliability, dependency and venerability and these are reflected on online transactions. According to Corbit et. al. , (2003) in the relationship marketing paradigm, trust is generally viewed as an essential ingredient for a successful relationship. Trust as a willingness to rely on an exchange partner in whom one has confidence. Trust is the perception of ‘‘confidence in the exchange partner’s reliability and integrity. According to balance theory it states that consumers tend to develop a positive towards those with whom they have prior association.
Greater the association, more the consumer experience, more is the positive attitude developed towards e-commerce sites. Successful e-commerce websites are those that build trust in consumers and reduce the risk perceptions through effective technologies and marketing activities (Corbit et. al. , 2003). Some of the key drivers of online trust are – security – privacy – advice – brand strength – fulfillment of order conditions – features of the community – error free transaction or absence of errors of all these – Security and Privacy being of highest importance (Warren & Brandies, 1980).
The basic human dignity calls for “a right to be let alone” or a right to total privacy. In the present day the powerful media or the press has taken over to a new proportion. With the advancement of information technology as well the rise of the information society, privacy levels have been curtailed by the latest “right to information acts” being implemented by various governments (Warren & Brandies, 1980). According to a company website (ecommerce-digest. om) most ecommerce merchants leave the mechanics to their hosting company or IT staff, but it helps to understand the basic principles and discuss some of the basic principles of customer security as following and states that any system has to meet following four requirements: * Privacy: information must be kept from unauthorized parties * Integrity: message must not be altered or tampered with * Authentication: sender and recipient must prove their identities to each other * Non-repudiation: proof is needed that the message was indeed received (ecommerce-digest. com).
Online Privacy Policies and Adoption of Internet Seals Fair Information Practice Principles, which were adopted prior to the internet widespread, need to be based for arriving at online privacy standards. These primary principles are as follows: Notice: Disclosing the information practices by the Data Collectors (e-commerce web portals) prior to the collecting of the personal information from the consumers. This totally keeps the consumer aware of the practices being adopted by the web portal and whatever decision is taken subsequently is at their own risk and security aspects (Miyazaki & Fernandez 2000; Sheehan & Hoy, 2000).
Choice: Consumers needs to be kept aware of – whether and how – the personal information provided by them online the portal, could be used, beyond the purposes for which the information is provided by them to the e-commerce web portal. Here, the consumers are not only alerted on the ways of utilizing the information, also their prior consent is obtained in order to proceed further for intended purposes (Miyazaki & Fernandez 2000; Sheehan & Hoy, 2000).
Access: provision of letting the consumers being able to view the accuracy as well as the completeness of the data gathered from them by the e-commerce web portal. This enables them to contest the same, if they so desire to do so (Miyazaki & Fernandez 2000; Sheehan & Hoy, 2000). Security: This is the major concern of any consumer. As the consumers are slowly but steadily moving from physical shopping to the internet shopping environments. This aspect only stops them from using the e-commerce portals, for the fear of its inadequate security measures or the levels.
As such, the role of Security in this kind of environment is highly desirable form the consumer’s perception (Miyazaki & Fernandez 2000; Sheehan & Hoy, 2000). The data collectors or the e-commerce web based portals, need to assure the consumers that the information collected on line from them is “totally accurate, secure and will not be used for un-authorized purposes by the people, who are not supposed to be dealing with such data of the consumers” (Miyazaki & Fernandez 2000; Sheehan & Hoy, 2000). PROBLEM DEFINITION
E-commerce is an act involving an online transaction. It could be anything from ordering a product or service online, paid content being delivered online sometimes, and financial transactions such as payments to various services such as water, electricity, telephone, rail, road and air services, movement of money from one account to another. The opportunities that arise out of E-commerce are: E-learning, E-business, E-insurance, E-ticketing etc. The internet based E-Commerce, besides its own major advantages, has some is-advantages too coming with it. These days, most of the web sites on the Internet are not focusing on the security, privacy and trust concerns of the consumers; which is highly essential for an ongoing relationship with the consumers. Most of the websites, unfortunately, are acting as “online service catalogs providers or catalog display centers”. Their failure to convince the consumers on the security and safety of their privacy issues is leading to failure of not being able to convert the “clicks” into “closure of deals”.
This is simply because they are not effective on their website on the safety, privacy and trust related information as expected by the consumers of the present day. Therefore, here security, privacy and trust are the major concern of any consumer. As more consumers are slowly but steadily moving from regular shopping to the internet shopping environments these aspects become very vital for the consumers. Thus this research intends to investigate and discuss the varying consumer perceptions on security, privacy and trust in e-commerce portals. RESEARCH METHODOLOGIES
The purpose of this study is to investigate and discuss the perceptions of online consumers towards privacy, security and trust on e-portals. The different perceptions reported in this paper were identified by review of literature in relation to this issue (trust, security and privacy). A questionnaire consisting 21 questions were developed and mailed to 150 e-commerce (B2B and B2C) consumers (an email survey was conducted) in three major emirates of UAE (Abu Dhabi, Dubai and Sharjah) where in 108 individuals responded to the survey. The questions were developed from literature review, news, security and privacy issues.
People who make online shopping have email Id’s as conformation of purchase is made through emails, hence we have approached this methodology. The sample email ids were borrowed from social networking sites. A pilot email was sent to them to assess their willingness to participate in this survey. Only those who were interested in the survey were sent the main questionnaire. SURVEY RESULTS The following tables (table 1 and 2) indicate the percentage responses according to demographics, consumer behavior other issues related to usage of e-portals Table 1: Percentage response according to gender, age and occupation Characteristics| % Response|
Gender| Males| 72. 3| Females| 27. 7| Age| 18-25| 23. 2| 25-35| 48. 1| 35-45| 15. 4| 45-55| 12. 3| 55 and above| 2. 0| Occupation| Managers| 12. 2| Employees| 36. 3| Students| 17. 2| Others| 34. 3| According to the demographics out of 108 people surveyed 72. 3% were males and 27. 7% were males of which 23. 2% were under the age group of 18 – 25, 48. 1% were under the age group of 25 – 35, 15. 4% were under the age group of 35 – 45, 12. 3% were under the age group of 45 – 55 and the other 2. 0% were under the age group of 55 and above. Next considering the occupation of the respondents surveyed it is seen that 12. 2% were managers, 36. % were employees, 17. 2% were students and 34. 3% were others. This clearly indicates that the survey included more percentage of males when compared to females and people in the age group of 25-35 are of the highest and most on the respondents were employees and others. The following table indicates the percentage response in accordance with consumer behavior and opinion towards browsing e-portals and online purchases, E-portal sites regularly visited, Frequency of online purchase, Concernedness and Willingness. Table 2: Consumer behavior towards browsing, purchase, frequency of usage, concernedness and willingness Behavior| % Response |
Browse e-portals| Yes| 98. 5| No| 1. 5| Online purchases| Yes| 68. 7| No| 31. 3| E-portal sites regularly visited| Brownbag. ae| 21. 2| eRealDeal. com| 30. 1| Frobes. com| 3. 0| Ellamart. com| 24. 5| eTechnoworld. com| 18. 1| BooksArabia. com| 3. 1| Frequency of online purchase| Regularly| 42. 3| Occasionally| 46. 4| Never| 11. 3| Concernedness| Strongly concerned| 96. 3| Concerned| 3. 6| Neutral| 1| Not concerned| Nil| Willingness| Yes | 2. 3| No| 97. 7| According to the survey results it is seen that 98. 5% respondents browse e-portals and of which 68. 7% make transactions through e-portals. RealDeal. com portal is mostly used (30. 1%) in UAE by the respondents where as Ellamart. com stands in the 2nd position (24. 5%). Occasional purchasers are more (46. 4%) when compared to regular purchasers (42. 3%). Survey indicates that 96. 3% people are strongly concerned towards the abuse of your financial and other personal information when/they purchase things online. When questioned about willingness towards purchase of anything online in case their (consumer) concerns are addressed or eliminated, this survey indicated that 97. 7% people do not show willingness.
The following table indicates the level of opinions of online consumers towards various issues related to security, privacy and trust. Table 3: Consumer perceptions towards issues related to security, privacy and trust Level of opinion| % Response| Online or internet security is becoming an increasingly important issue| Strongly agree| 47. 5| Agree| 31. 6| Neutral| 12. 7| Disagree| 5. 7| Strongly disagree| 0. 6| The privacy of Internet users is greatly violated| Strongly agree| 41. 8| Agree| 33. 5| Neutral| 11. 4| Disagree| 9. 5| Strongly disagree| 1. 9| Internet (e-portals) shopping sites cannot be trusted|
Strongly agree| 40. 5| Agree| 28. 5| Neutral| 22. 2| Disagree| 4. 4| Strongly disagree| 2. 5| To reduce the risk of liability, e-portals should institute privacy protection policies| Strongly agree| 47. 4| Agree| 32. 9| Neutral| 13. 7| Disagree| 5. 5| Strongly disagree| 0. 5| To reduce the risk of compromise on financial information e-portal should institute security policies| Strongly agree| 41. 8| Agree| 33. 8| Neutral| 11. 9| Disagree| 9. 8| Strongly disagree| 1. 8| Despite all the safety precautions in place today, e-portals are not safeguarded enough| Strongly agree| 40. | Agree| 25. 5| Neutral| 25. 2| Disagree| 4. 4| Strongly disagree| 2. 5| E-commerce merchants can disclose personal information if they deem it necessary| Strongly agree| 7. 0| Agree| 15. 2| Neutral| 21. 5| Disagree| 20. 3| Strongly disagree| 33. 5| The current laws and regulations are sufficient for protecting information| Strongly agree| 3. 2| Agree| 13. 9| Neutral| 34. 8| Disagree| 35. 4| Strongly disagree| 10. 1| The current security features such as encryption and passwords are sufficient to provide security and safety on the Internet| Strongly agree| 4. 3| Agree| 20. 9|
Neutral| 25. 8| Disagree| 38. 1| Strongly disagree| 6. 4| I am assured of the safety of my credit card information on the e-portals| Strongly agree| 3. 1| Agree| 11. 5| Neutral| 15. 1| Disagree| 29. 8| Strongly disagree| 38. 0| Stalking and impersonation (including forged identity) are common on the e-portals| Strongly agree| 32. 3| Agree| 42. 4| Neutral| 13. 9| Disagree| 7. 0| Strongly disagree| 2. 5| Security and privacy concerns are barriers for my shopping online| Strongly agree| 44. 1| Agree| 31. 2| Neutral| 20. 5| Disagree| 3. 2| Strongly disagree| 1. 0| As depicted over 89. % of participants (strongly agreed and agree) agreed that online or internet security is becoming an increasingly important issue. A large number 85. 3% of participants (strongly agreed and agree) agreed that the privacy of internet users is greatly violated; looking at the response for Internet (e-portals) shopping sites cannot be trusted it is indicated that 69. 0% agreed (strongly agreed and agree) where as 22. 2% showed a neutral opinion. The survey indicates that 13. 7% participants were neutral but a highly 90. 3% participants agreed that reduced the risk of liability, e-portals should institute privacy protection policies.
RECOMMENDATIONS Measures to Reduce the Consumer’s Negative Perceptions on Security With the kind of negative consumer perception on the e-commerce trading and patronizing with such portals, it becomes important on the part of the owners of such portals to attempt reducing the consumers perceived security (risk) factors. One of such important measures could be the use of seal of approval from a third party agency. Attestation by such third parties on the maintenance of security and privacy levels, may be believed by the consumers, better than the one’s issued by the own agencies of e-commerce portal managements.
This improved trust or the confidence level of the consumers, helps improving the online transactions using the e-commerce portals. Secondly, the seal of approval can be treated as a co-branding strategy of a web based e-commerce portal aligning with a trusted third party agency which ultimately leads to the gain of trust/confidence of the potential customers/consumers; as they are assured of security by a neutral agency, which is in line with their expectations (Krishnamurthy & Sandeep, 2002). One of the major responsibilities of online consumers is to maintain the privacy.
When they look for any e commerce site and intend to do any transactions it is important for them to look for privacy statements of that site (Udo, 2001). According to Udo (2001) sites in which privacy concerns are sensitive should clearly display privacy policies and should offer the consumer to choose to share their personal information or restrict its use and such sites should also state how to use the privacy policies. The following have been provided as the top 12 ways to protect the user’s privacy online (McCandlish, 2002): * Do not reveal personal information inadvertently Turn on cookie notices in your Web browser * Keep a “clean’’ e-mail address * Don’t reveal personal details to strangers or just-met “friends’’ * Realize you may be monitored at work, avoid sending highly personal e-mail to mailing lists, and keep sensitive files on your home computer * Do not reply to spammers, for anything * Be conscious of Web security * Be conscious of home computer security * Examine privacy policies and seals * Remember that you decide what information about yourself to reveal, when, why, and to whom * Use encryption Keep sensitive files on your home computer