The Effects of System Features, Perceived Risk and Benefit, and Customer Characteristics on Online Bill Paying

The Effects of System Features, Perceived Risk and Benefit, and Customer Characteristics on Online Bill Paying

Fang He (Southern Illinois University at Carbondale, USA)
DOI: 10.4018/978-1-60566-154-4.ch019
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Along with the exponential increase in online business transactions, the online payment system has gained in popularity because vendors and creditors realize its growing importance as a foundation to improve their information infrastructure and to achieve “paperless” operating efficiency.However, due to per se different characteristics among customers and Web-systems, both sides’ perspectives and technology factors could cause a significant level of variation in customers’ acceptance of online payment methods. Our research involving 148 subjects who participated in a field survey, examined the impact of a series of possible decision factors, including perceived risk, perceived benefits, vendor’s system features, and customers’ characteristics, on the intention to use an online payment system by customers. The results suggest that vendors/creditors should:one, pay particular attention to improving the security and the ease-of-use of their transaction network; and two, focus on adding necessary option features, such as recurring automatic deductions, so that they can speed up the transformation process and encourage customers to switch to using online payment methods.
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It was estimated that by 2007 approximately 71.4% of US residents would be using the Internet. This is complemented by the fact that there has been a growth of 125.6% in Internet use from 2000 to 2007 (Internet World Stats, 2007). Also, eMarketer’s (2005) report estimated that US e-commerce retail sales would rise from $56 billion in 2003 to $84.5 billion in 2005, growing at above 20% annually, and that number will further grow to $139 billion by 2008, significantly outpacing traditional retail commerce spending over the next couple of years. This e-commerce growth has provided the impetus and opportunities for traditional business processes (e.g., sales, marketing, payments, collection, financing and investing) to transfer online. Consequently, the online payment method has become more popular, as it has been increasingly important for financial sectors to improve their information infrastructure (Lee & Cata, 2005). Online payment, also addressed as an electronic payment or an Internet payment, is defined as “an electronic payment made via a web browser for goods and services using credit or debit cards” (Bitpipe, 2006). Compared with traditional payment methods such as pay-by-check, pay-by-phone or wire transfer, online payment is considered more time- and cost-efficient, convenient, and flexible for customers and businesses (Sorkin, 2001;Yu, His, and Kuo, 2002). However, customers can differ and web-based systems can vary in terms of services and features offered, perhaps leading to a significant level of variation in the intention to use online payment systems. What makes e-customers more widely accept online payment methods? What should e-vendors focus on to accelerate such a technology acceptance process? Our study thus focuses on the impact of these decision factors on the adoption of an online payment system by customers, with a framework exploring how the adoption factors drive or impede customers to accept online payment systems.

Recent empirical studies have investigated the impact of key factors on the customer adoption process of various e-commerce activities, such as consumer shopping, entertainment, and stock trading (Eastin, 2002; Gefen, Karahanna & Straub, 2004; Hsu & Lu, 2004; Huang, Hung & Yen, 2004). These findings jointly suggest that individuals’ behaviors could be explained by perceived characteristics of the online transaction methods, vendors’ Web site and product/service characteristics, and customer characteristics, not only supporting but also extending the widely-accepted Technology Acceptance Model (TAM) (Davis, 1989) which emphasizes the importance of perceived usefulness (PU) and perceived ease of use (PEOU) on e-commerce customer decision-making. Lui & Jamieson (2003), for example, incorporate factors such as perceived trust and risk into the TAM; and Ilie et al. (2005) incorporate perceived relative advantages, perceived compatibility, and gender difference into the TAM framework. Yet, given that online payments are increasingly accepted in the business world, so far few published empirical studies have specifically addressed the underlying factors that could materially affect customers’ decisions to adopt online payments. Research progress in this area will help vendors make better plans regarding the replacement of traditional billing and payment tools with integrated online systems that are facilitated with modern technology.

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International Advisory Board
Table of Contents
In Lee
Chapter 1
Keith F. Ward, Erik Rolland, Raymond A. Patterson
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Managing the Customer Relationship: A Framework for E-CRM Analysis
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Soumaya Ben Letaifa
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A New Conceptual Framework for Greater Success with Integration of E-CRM
Chapter 3
Tim Coltman
Most sectors of industry, commerce, and government have reported variation in the performance payoff from electronic customer relationship... Sample PDF
Managerial Discretion and E-CRM Performance
Chapter 4
Patricia T. Warrington, Elizabeth Gangstad, Richard Feinberg, Ko de Ruyter
Multi-channel retailers that utilize an e-CRM approach stand to benefit in multiple arenas by providing targeted customer service as well as gaining... Sample PDF
Multi-Channel Retailing and Customer Satisfaction: Implications for E-CRM
Chapter 5
Veronica Liljander, Pia Polsa, Kim Forsberg
Not until very recently has mobile phone technology become sophisticated enough to allow more complex customized programs, which enable companies to... Sample PDF
Do Mobile CRM Services Appeal to Loyalty Program Customers?
Chapter 6
Michael Shumanov
While the managerial rationale for adopting customer relationship management (CRM) has been fairly well articulated in the literature, research on... Sample PDF
Developing a Global CRM Strategy
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John Gallaugher
This article synthesizes and leverages two strategic frameworks when analyzing the true nature of strategy and the Internet: (1) the concept of... Sample PDF
Strategic Positioning and Resource-Based Thinking: Cutting Through the Haze of Punditry to Understand Factors Behind Sustainable, Successful Internet Businesses
Chapter 8
Savvas Papagiannidis
This chapter covers the concept of e-business models and how they relate to the music video and television environments. After identifying the value... Sample PDF
A Tale of E-Business Models: From the Music to the Television Industry
Chapter 9
Kirill M. Yurov
Healthcare technology markets have been recently identified as potential investment targets. Having survived a major environmental shock, the... Sample PDF
Strategic Maneuvering in Healthcare Technology Markets: The Case of Emdeon Corporation
Chapter 10
Olli Kuivalainen
The aim of this chapter is to provide a holistic exploration of the development of the business model of a magazine Web site, and of the factors... Sample PDF
Complementary Role of Website in Business Model Development
Chapter 11
Tobias Kollmann is a German B2C platform for different kinds of service and handcraft orders. Based on the concept of reverse auctions, demanders... Sample PDF
A Reverse Auction-Based E-Business Model for B2C Service Markets
Chapter 12
Denis Caro
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Evolving E-Health Systems: Symbiotic Constructs Between Corporate and E-Healthcare Worlds in International Space
Chapter 13
Karl Knapp, Sushil K. Sharma, Kevin King
Offshore information technology (IT) outsourcing has been becoming mainstream alternative to inhouse operations. While offshore development is a... Sample PDF
Socio-Economic Impacts of Offshore Outsourcing of Information Technology
Chapter 14
Indrit Troshani
The eXtensible Business Reporting Language (XBRL) is an emerging XML-based standard which has the potential to significantly improve the efficiency... Sample PDF
Towards Theory Development for Emergent E-Business Innovations: Using Convergent Interviewing to Explore the Adoption of XBRL in Australia
Chapter 15
Bill Vassiliadis
Copyright protection is becoming an important issue for organizations that create, use, and distribute digital content through e-commerce channels.... Sample PDF
An Introduction to the Management and Protection of Intellectual Property Rights
Chapter 16
Tagelsir Mohamed Gasmelseid
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Intelligent Contracting: An E-Supply Chain Management Perspective
Chapter 17
Jaeki Song, Eric A. Walden
In this work, we examined the boundary of the applicability of network effects theory. We theorized that when adoption is cheap, the cognitive... Sample PDF
The Applicability of Network Effect Theory to Low-Cost Adoption Decisions: An Investigation of Peer-to-Peer File Sharing Technologies
Chapter 18
Wen-Jang Jih
Two mutually reinforcing forces currently are at work to propel an upward spiraling in the business arena. As wireless communication technology... Sample PDF
An Empirical Analysis of Cellular Phone Users' Convenience Perception and Its Impact on Shopping Intention in Mobile Commerce
Chapter 19
Fang He
Along with the exponential increase in online business transactions, the online payment system has gained in popularity because vendors and... Sample PDF
The Effects of System Features, Perceived Risk and Benefit, and Customer Characteristics on Online Bill Paying
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