Payment Methods and Purchase Intention from Online Stores: An Empirical Study in Jordan

Payment Methods and Purchase Intention from Online Stores: An Empirical Study in Jordan

Rasha Abu-Shamaa (MIS Department, Yarmouk University, Irbid, Jordan), Emad Abu-Shanab (MIS Department, Yarmouk University, Irbid, Jordan) and Rawan Khasawneh (CIS Department, Jordan University of Science & Technology, Irbid, Jordan)
Copyright: © 2016 |Pages: 14
DOI: 10.4018/IJEBR.2016040103
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Abstract

Online retail stores are a new booming phenomenon in the Arab world. Recent years witnessed a significant increase in the number of Arabic online stores launched for different kinds of products and services. Stores offer grocery products, fashion and life style items, and electronics and technology devices. Regardless of the growing investments in the Arabic online retail sector, Arabic consumers are still doubtful about online shopping. This research investigated the factors affecting Jordanians' purchase intentions from online stores by extending the technology acceptance model (TAM) to include payment method. The model included payment method (PM), perceived ease of use (PEOU) and perceived usefulness (PU), as direct predictors of the intention to use online stores and moderated by consumers' level of trust of such factors. Results indicated that TAM predictors, and payment methods do affect consumers' intention to purchase online. However, PM and PEOU relationships with the intention to shop online are the only relationships moderated by trust.
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1. Introduction

In the last few years, the Internet has become a marketing channel with huge purchasing power supported by the increased Internet flexibility and decreased cost (Kim, 2010). However, online shopping is still a developing business in the Arab world, where consumers are moving slowly towards trying and adopting it.

According to (IPSOS, 2013) clothes are the top items purchased online in the Arab world, where Arabic consumers prefer buying from region specific online stores rather than international stores as amazon.com or ebay.com. On the other hand, the same survey has found that only (6%, 19%, and 10%) of UAE, Kuwait, and KSA online users shop online compared to an online penetration of (46%, 35%, 25% respectively). Such inconsistent percentages indicate the importance of exploring such domain more carefully.

The low percentage of consumers purchasing online is partially caused by the lack of trust in the online environment in general and the fear that purchased products may not match their online description and expected quality (AlGhamdi, Drew & Alhussain, 2012; Mishra & Mathew, 2013; Abu-Shanab & Ghaleb, 2012). The intention to purchase from online stores is also affected by the confidentiality level of credit cards and personal information provided to the site, the trustworthiness of the online retailer, the convenience of delivery, the quality of the product, and the availability of customer service representatives (Monsuwe, Dellaert & Ruyter, 2004; Kim, 2010; Mishra & Mathew, 2013; Malik & Guptha, 2013).

From another perspective, the intention to purchase from online stores is affected by consumers’ characteristics (Topaloğlu, 2012). In a study by Nirmala & Dewi (2011), the authors found that consumers with a tendency to shop from home through television, catalogs, or other channels are more likely to purchase from online stores. This also applies to consumers who have an innovative personality and like to buy special or unique products from the web. Similarly, consumers with higher income or educational level has higher tendency to shop online and use new innovative shopping models (Monsuwe, Dellaert & Ruyter, 2004). Such result indicates that consumers' intention to shop online depends on their personal perspective of the service and product quality (Malik & Guptha, 2013).

This study aims at contributing to the e-commerce literature by investigating the factors influencing the purchase intentions of Jordanian consumers, and the moderation effect of trust level on these factors. Based on that, we intended to answer the following two research questions:

  • RQ1: What are the factors that affect consumers' purchase intentions from online stores?

  • RQ2: How does the “consumers’ level of trust” moderate the relationship between the proposed factors and the purchase intention?

In order to achieve this purpose, the study has proposed a conceptual model extended from the technology acceptance model (Davis, 1989). The model was empirically tested through a survey targeting a convenient sample of Jordanians in different sectors. The rest of the paper is organized as follows: Section 2 describes a brief overview of related work. Section 3 presents and elaborates on the research methodology followed in this study. Section 4 exhibits data analysis and discussion. Finally, we provide our conclusions and future work in the last section.

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