nuff not enuff

Sunday 2 June 2013

CASE STUDY : INVESTIGATING TRUST IN E-COMMERCE : A LITERATURE REVIEW AND A MODEL FOR ITS FORMATION IN CUSTOMER RELATIONSHIPS



JTU396E E COMMERCE ASSIGNMENT 2

As a matter of fact, trust is the essential element in customer point of view. Any company would be undoubtedly believed it is slowly getting the momentum and coming through the selected e-commerce application and tools. Trust by definition[1] in a social context, has several connotations. Definitions of trust typically refer to a situation characterized by the following aspects: One party (trustor) is willing to rely on the actions of another party (trustee); the situation is directed to the future. In addition, the trustor (voluntarily or forcedly) abandons control over the actions performed by the trustee. As a consequence, the trustor is uncertain about the outcome of the other's actions; he can only develop and evaluate expectations. The uncertainty involves the risk of failure or harm to the trustor if the trustee will not behave as desired. According to (Lewis and Weigert, 1985; Butler, 1991; Barber, 1983) trust is a highly complex, multi-dimensional and (Luhmann, 1979) stated that it is context-specific phenomenon. Papadopoulou, Kanellis and Martakos (2001) stated in their case study, trust is fast becoming the focus of many Information Systems researcher and that trust and relationship building can be proposed by a theoretical model for the formation of trust in the customer-business relationship. Five categories of trust in e-commerce was identified, and analyzed into three major dimensions, namely determinants, approaches and consequences. (Please refer to Appendix : Table 1). According to Papadopoulou, Kanellis and Martakos (2001), the five categories of trust types as presented in Table 1 indicate that research on e-commerce trust is associated with the online system/application, the vendor, the Internet shopping process, people at both intra[2]organizational and inter[3]organizational level and firm trust in e-business.
Determinant factors (Papadopoulou, Kanellis and Martakos, 2001) represent factors that influence trust in e-commerce or the lack of it.  The factors proposed to have an impact on trust are associated with the personality of the online consumer, the system, the information, the vendor, the transaction, the business stakeholders, and the external environment.
The approaches proposed to address the problem of lack of trust are mainly recommendations and suggested guidelines to designers of Information Systems (Shneiderman, 2000) and Internet companies towards establishing partial dimensions of trust in various contexts and do not include specific methods or processes for the formation of trust. They involve the design of the e-commerce system interface (Egger, 2000), the content and the range of information provided (Urban et al., 2000) and the way it is organized and displayed, security and privacy issues (Hoffman et al., 1999), the provision of services, fulfillment, and the business strategy in general (Urban et al., 2000; Einwiller et al., 2000).
The consequence of trust is clearly reflected by the diversity of determinants and approaches suggested in the case study. It is depending on the trust type questionable and the purpose of the case study. Furthermore, trust has been considered as a requirement that may result in reducing consumers’ perceived risk (Cheung and Lee, 2000; Einwiller et al., 2000).
There are numbers of researchers that highlighted and define the categorization of trust models namely Egger, Chung & Lee, Ambrose and Johnson, Kini & Choobineh and Tan & Thoen ( please refer to appendix : Table 2 ) based on four main predecessors, namely consumer characteristic, vendor related believes, environmental characteristics and application related characteristics. According to Papadopoulou, Kanellis and Martakos (2001), the findings of the trust models in the Table 2, showed that the models they describe are limited to presenting the determinants of trust and the way they interrelate and influence its creation. As a result, they do not propose specific methods or processes for trust formation. This is the main reason this case study is written to address the needs of the conceptual model for the formation of trust in business-to-consumer e-commerce relationships. The three aspect of trust, representing its constituents, its determinants and its development modes, have been synthesized and theoretically interrelated, resulting in an integrated model and a vertical understanding of how trust is formed in a relational exchange between two parties ( Please refer to Appendix : Table 3 ).
Papadopoulou, Kanellis and Martakos (2001) model of trust formation ( Please refer to Appendix : Figure 1 ) has been build based on the assumption that a repetition interaction with promise made, enabled and kept within an electronic servicescape. According to Wanninger’s et al. (1997), a servicescape is one of the three primary components that comprise an e-commerce information system. The other two are the supporting infrastructure and customer database & analytical tools to support the relationship marketing.
The model introduced in the case study indicated that a transference process consists of disposition to trust, institution-based trust (McKnight and Chervany, 1996) and initial trusting beliefs. Initially, customer has a tendency to trust others based on personality and cultural factors which is called ‘disposition to trust’, enhanced by the situations related which is called ‘institution-based trust’, which involves legal aspects associated with e-commerce and perceptions regarding the security and privacy offered by the business. According to Doney and Cannon (1997), the customer has initial trusting beliefs that have been formed through the transference process. As a result of this, the customer is being open to promises made by the business. Then the customer is interested and forms a trusting intention towards it and anticipates the promise to be enabled. 
When the servicescape allow the promise, the trusting intention need to be manifested and this will cause the customer to accept the risk inherent in the situation and actually depend on the promise, thus act in a trusting behavior. The positive impact on the customer’s perceptions by keeping the promise will definitely cause the customer to actively interact with the servicescape considering the quality of the interaction taking place and future expectation by the customer towards the model. According to Carlzon (1987), this is call “moment of truth”. The service encounter is evaluated by the customer and comparison is made by the service expected and currently received. The process would include customer satisfaction element and reflected in the customer’s trusting beliefs (McKnight and Chervany, 1996). ( Please refer to Appendix : Figure 2 ).
Papadopoulou, Kanellis and Martakos (2001) stated that trust evolves over time as the customer engages in repeated interactions with promises being fulfilled within the servicescape. Each time a promise is made, enabled and kept, it is evaluated with the intentionality, the capability and the credibility process confirming customer’s trusting beliefs in the business benevolence, competence and credibility. Trust[4] can be attributed to relationships between people. It can be demonstrated that humans have a natural disposition to trust and to judge trustworthiness that can be traced to the neurobiological structure and activity of a human brain.
The research paper is not fully completed and need to be revised again in the future specially in the categorization part. A further research need to be done and gain more inputs as the research goes on continuously.
As the time goes by, the model introduced by the case study writer would be definitely assisting and supporting its entity discussed. The trust concept on customer would reflected the business as a whole and the firm accordingly.

Appendix
Table 1

Table 2
Table 3

Figure 1
Figure 2



[1] By referring to Wikipedia : The Free Encyclopedia.
[2] “The focus is within” from http://www.thefreedictionary.com/intra-
[3] “The focus is outside” from http://www.thefreedictionary.com/inter-
[4] By referring to Wikipedia : The Free Encyclopedia

My Regional Center, Pulau Pinang



My Regional Center, Pulau Pinang
My Regional Center, Pulau Pinang is located within the main campus of ‘Universiti Sains Malaysia’ (USM). It is a ‘huge place’ but always congested specifically traffic jam during intensive weeks. Parking space was limited for student. The provided transportation via the main campus from any hostel within or outside the campus is slow service. The Pulau Pinang regional center is become overcrowded during intensive weeks and the same problem repeating itself time after time.
Such a big place but no one is controlling the traffic during intensive week. All the security guards station only at the post of entry and no one dare to play their role during traffic. Security guards is no where to be seen patrolling the area when trouble occur. Lack of security guards to assist a large number of students during peak time. It is always a problem when student attending the intensive weeks where location of lectures is congested and crowded.
Student would find it hard to park their own vehicle because of the limited parking space. The over crowded student mostly used their own vehicles to move around within the campus and causing chaos situation when it related to parking time. The location of the lectures always plays a big role as everybody tends to park as near as they can to the location. The irresponsibility motorcyclist is taking the car parking space which added more woes to the problem. Therefore, parking space is a big headache during intensive weeks.
The alternative transportation was the bus and student seldom use it as it is poor in service. Sometime it is not practical just to bring a number of student to some location which is why the driver always wanted to fill in at least three quarter of the bus capacity to fully utilize the facility provided by the university. At some other time, the bus just arrived and will not moving to its destination until the other bus arrive. The time taken to the location intended is slightly slow as compared if the student walk on foot. It is clear that the transportation is very poor in service.
As we can see, my regional center, Pulau Pinang is very congested during intensive weeks. It is a big place but not fully utillized. Parking space is still the main problem. The alternative transportation is not helping to solve the matter. Someone or somebody need to be looking in this matter seriously in order to solve the problem before it getting worst.

JUE 200 USM

CASE STUDY : ONLINE PAYMENT MARKETPLACE : GOAT RODEO




JTU 396E E-Commerce – Assignment 1 

The case study as selected above is about online payment issues for any business transaction concerns. The so called ‘big players’ in this payment marketplace are Apple, Google, Facebook and Amazon which provided their respective customer with their own version of future payment system. An alternative popular online payment surely goes to PayPal. This entire provider objective is to provide their customer a way to pay for the goods or services purchases online with a small fee charges. PayPal for example, deals with the customer request by processing the transaction jointly with the credit card companies which approaching 70% of online payments worldwide. But the most important factor of the involvement of this big company to participate in online marketing is the emergence of the mobile platforms of smartphones and tablets based on the newer technologies explosion experience.
Based on the case study, it stated that the value of online payment is about $310 billion in 2011 alone and an increment at 12% a year is such a persuasive temptation to resist by any. Nowadays, all are eyeing the mobile commerce[1] which started to show impact in the United States in 2011 ignited the fast-growing segment of the larger online payment marketplace. It’s a good indication of how small devices can produce a big influence in the future related transaction online. Neither cash money, credit card nor debit card should be present in the wallet anymore as digital wallet is on its way to break the conventional method of paying for goods and services.  The revenue produced by the mobile commerce is reaching a whooping $22 billion from the overall online payment sum stated above and growing at 20% per year. For the customer point of view, this means a new dimension of shopping spree is available and it is going to be much easier, quick and safer way of implementing in the routine day. No more complicated and fussy approach to follow such as filling name, credit card number, pin number, address, office number and so on when a one time registration give the solution.
It is found that mobile payment is agreed as the best solution of keeping out any cash or card ever needed to be brought along during any transaction done but there is not yet a mobile payment system that are really secure and reliable to replace the conventional method. Namely, customers still have to give all the information by entering it into a tiny screen on their mobile phone. This is not a practical approach to cut the time short but ones need to use PayPal to solve the problem. PayPal will collect and save all the information and manage the transaction later on behalf of its customer. Therefore, customer can just verify the transaction easily without experiencing the complicated moments. The facts that PayPal controlling almost 78% of the alternative online payment and involving itself in nearly $2 billion in mobile commerce, even without the strength of monopoly any hardware or software used in the smartphones or android technology like Apple, Google and RIM, it can be said that they are the front-runners in this business worldwide. The only creditable PayPal have is the 98 million active users on their database which others do not posses. Such as Apple, Google and RIM ( the manufacturer of BlackBerry), their online payment system is way outdated and uncompetitive for the customer to choose from. This is because, like Google, they provide Google Checkout which is grown at 7% of the alternative payment market or in other words, not popular by demand and used; Apple used Apple’s iTunes Store which is a closed type environment of online payment available only to iPhone or iPad registered user; and RIM have nothing similar to any of online payment applications. Somehow, customer does not have many choices upon accessing any online transaction by subscription nor registering to any of the entity mention above except PayPal. Same issue goes to Amazon.com even it is slightly differs from the three company, where they were collecting almost $1 billion in goods from their customer based online in 2010. Recently, a major concerns floating around the business online transaction regarding the process of providing information online at the Amazon.com into a tiny screen of mobile devices. This is not good and perhaps could lead to decreasing revenues in the future because customers are looking at other options or alternative available.
One of the project involving Google, Citigroup and MasterCard are embedded NFC ( Near Field Communication[2] ) into Android Mobile Devices that would allow consumers or customers to pay merchants by waving their smartphones in front of a reader provided by the Verifone, the largest manufacturer of credit card readers for cash registers in the world. The problem is, how can this solve the security measures in the mobile commerce environment? The waving motion took place and follow ups by entering some sort of PIN code to approve the payment which is very unsecure method of payment online because nothing else is related to the transaction occurred. Somebody or someone might have misuse or decoding the PIN code easily. However, Google do not plan to implement the method in the near future because they are concentrating of placing more ads to their registered mobile users.
Social website such as Facebook and twitter also in the process of creating some sort of similar application of mobile online payment. Facebook called it Facebook credits which it can be purchased by using the credit card, while twitter are considering their user to frequently used their two system called Twippr or Twitpay. Both of the twitter based application functioning by downloading the message first, and then acknowledged the recipient, the amount and most importantly, the currency identification before the recipient is notified regarding the transaction. Nevertheless, both twitter systems rely heavily on PayPal to complete the life-cycle. Again, PayPal superior influence onto mobile commerce is beyond doubt.
Even though, cell phone carrier such as Verizon, AT&T, T-Mobile and others around the world did try to persuade consumers to fully utilize the Isis system, which appeared to be bypassing the credit card companies entirely, it is widely known that it is been used all around the world respectively. However, this might threaten the credit card business in the future if it is fully implemented.
One company called Obopay, allowing their customer to purchase or transfer money by using mobile phone. Users can send money to anyone with a cell phone on any wireless network. Obopay have set a deal with Verizon, Nokia, BlackBerry, Citigroup and MasterCard. Currently, consumers need to load their account at the Obopay website complete with the credit card and debit card information to proceed. However, it is not practical to worldwide because Obopay accepting only consumers from United States, India, Kenya and Senegal. The idea is to eliminating credit cards loops so that it can reduce transaction cost for merchants and customers and making it easier to use the service.
According to the case study, the future of wireless payments is assured. The prediction is within five years from now, smartphones will replace the conventional method of carrying cash in the wallet, for an item less than $100, and will be the prefer choice of payment application soon. Android NFC devices show highly potential as online payment application while PayPal remain among the big player to improve once new technology built in the smartphones taking place.
Whatever the decision taken by the big player mentioned in the case study, the mobile commerce would be a hit in the near future. Anything related with the technology, software, hardware, carriers, merchant roles or even Isis system, would be a catalyses to generate a highly revenues to them. Consumers would be benefited by fast, convenient, secure and reliable mobile commerce application to purchase goods or services online. Absolutely, no complicated procedures, no waiting time, reduction cost at the maximum level, and perhaps no more roles played by the credit card companies in the future for any online payment in the marketplace. Anything related with the weaknesses of the implementation of mobile commerce would have been reduced and improved rapidly along with the emergence of new technology which may shrinked the widely boundary marketplace into a consumer-friendly environment sooner or later. In other words, the gap of online payment marketplace and mobile commerce is narrowed, the system is applicable to all and consumers will benefited from it integration.


[1] the use of cell phones to purchase goods and services online
[2] is a set of standards for smartphones and similar devices to establish radio communication with each other by touching them together or bringing them into close proximity, usually no more than a few centimeters. Present and anticipated applications include contactless transactions, data exchange, and simplified setup of more complex communications such as Wi-Fi. Communication is also possible between an NFC device and an unpowered NFC chip, called a "tag". (From Wikipedia, the free encyclopedia)