As technology continues to advance, the need for effective security network systems is extremely important. According to the U.S. Census Bureau (2010), electronic commerce activities, especially in the retail, manufacturing, merchant wholesale and service industries have grown faster than total economic activities in the nation. Thus, with the rapid demand for e-commerce transactions, efficient security measures are detrimental to the overall success of a business. Many businesses offer e-commerce, which allows consumers to purchase goods or services online with the use of a credit/debit card or PayPal. This transaction provides convenience and speedy checkout service for online customers.
Also, companies are able to use data obtained from e-commerce transactions to help them improve their operations. Boritz & No (2011) found that “most e-commerce companies collect, store, and exchange personal information obtained from individuals and use that information to support marketing strategies, gain greater insights into individuals’ behavior, and meet their needs and wants more effectively” (p. 12). But with its widespread popularity and easy access, the internet has become plagued with identity theft and online scams, which makes it a risky place to exchange funds and goods. Thus, the following research questions will examine the use of a privacy policies, security measures and fraud-prevention tools and effective shopping systems have on consumer trust and purchasing decisions.
Research Questions
Privacy policies help to ensure consumers that their personal information will remain confidential. They help to maintain trust between the consumer and the merchant by informing them of the confidentiality of the buying process. A thorough, detailed privacy policy provides consumers with a description of the buying process, how their information will be used and gives them an option to submit certain data. Thus, the underlying goal of the policy is to enhance consumer trust.
Q1: Qualitative. What effect does a privacy policy have on consumer trust?
Consumer trust and confidence allows customers to feel comfortable making purchasing decisions. Thus, a detailed privacy policy will help consumers to understand the confidentiality of their private data, which will increase their trust in the company. Trust is an important asset of any business relationship between a merchant and a buyer. It ultimately determines the consumer’s decision on whether or not to purchase a particular good or service.
Q2: Quantitative. Does a privacy policy on e-commerce sites have an impact on sales?
Hypothesis: A privacy policy will increase sales on an e-commerce site.
It is essential for businesses to implement security methods and fraud prevention tools to offset the risk of fraudulent activity. Checking verification of address and credit card is critical to ensuring that the identity of the person using the card matches the identity of the actual owner. Effective security measures can help to prevent fraudulent activity and ensure that a business’ operations flow efficiently.
Q3: Quantitative. Does fraud-prevention tools have an effect on the operations of a business?
Hypothesis: Fraud-prevention tools minimize the number of fraudulent payment issues.
Implementing a buying system that includes an organized and easy-to-use shopping cart and checkout system is also important to enhance the consumer’s buying experience. A shopping cart that allows consumers to choose and pick different items and add them to the cart and wishing lists will help assist the customer with their online shopping. Also, it will ensure that the consumer is able to sift through the goods and services effortlessly and enjoy their online shopping experience.
Q4: Qualitative. What effect does an effective shopping cart and checkout system have on consumers’ online shopping experience.
Problem Statement
According to Farshchi, Gharib & Ziyaee (2011), “Many businesses and customers are still cautious about participating in ecommerce, and security concerns are often cited as being the single most important barrier. This loss of trust on exchange online is being fuelled by continued stories of hacker attacks on e-commerce sites and consumer data privacy abuse” (p. 113). Security issues are a major problem for many areas in society. For instance, security in healthcare is an ever-growing issue among many medical establishments and patients. Namoglu & Ulgen (2013) found that the primary challenge in the healthcare system is “allowing knowledge transfer to hospital staff while still ensuring compliance with security mandates” (p. 126).
This research is relevant because it highlights the ongoing issue with security among e-commerce sites. The need for stronger, more effective security measures is detrimental to maintain clientele and increase sales within a businesses. Having structured security methods is important to ensure that all areas of the e-commerce site are evaluated and monitored properly to prevent hackers and online frauds and scams. Zhao & Zhao (2012) noted that cyber-attacks have “impaired or even shut down the e-commerce activities completely by damages such as website defacement, denial of service, price manipulation, financial fraud, or data breach” (p. 136).
Although many studies highlight the security issues among e-commerce sites, they do not offer a strategic security process to help offset the most important factors which decrease fraudulent activity, ensure consumer trust and increase purchases. Thus, the purpose of the study is to find the most viable solutions to security issues among e-commerce sites in an effort to maintain consumer trust and increase consumer purchases. Through effective solutions, companies will be able to thrive by increasing e-commerce sales and preventing loss of consumers and risk to business operations due to fraudulent activity.
- Boritz, J. & No, W.G. (2011). E-commerce and privacy: Exploring what we know and opportunities for future discovery. Journal of Information Systems, 25(2), 11-45.
- Farshchi, R.S., Gharib, F., Ziyaee, R. (2011). Study of security issues on traditional and new generation of e-commerce model. International Conference on Software and Computer Applications, 109, 113-117.
- Namoglu, N., Ulgen, Y. (2013). Network security vulnerabilities and personal privacy issues in healthcare information systems: A case study in a private hospital in Turkey, Studies in Health Technology and Informatics, 190, 126-128.
- Singer, R.W., Perry, A.J. (2015). Wearables: The well-dressed privacy policy. Intellectual Property and Technology Law Journal, 17(7), 24-27.
- Zhao, J.J. & Zhao, S.Y. (2012). Retail e-commerce security status among fortune 500 corporations. Journal of Education for Business, 87(3), 136-144.
