The e-Commerce environment has been dominated by methods of payment customary in offline businesses, and online consumers have, over the years, had to adapt to the use of credit cards and Internet bank accounts to pay for goods and services. However, market, technological and legal developments in recent years have contributed to a surge of innovations and changes in payment methods being offered over the Internet, including the development of new means of making payments and the alteration of existing ones. These alternative ways of paying for goods online have begun to make inroads in the online payments marketplace and given consumers and merchants new options over the traditional methods of payments.
Current literature offers few answers to the problems associated with the adoption of alternative payment methods by Australian consumers and businesses. Innovation adoption literature is too generalized to take into account the specific product characteristics inherent in payments products. Many of these characteristics are embodied within the broad construct of 'relative product advantage' which, as is argued in this study, does not provide the level of detail required for analyzing the unique attributes of payment methods.
This thesis examines the influences and challenges associated with the evaluation and selection of methods for paying for goods and services, specifically within the context of traditional a d alternative payment methods and the Internet environment. It analyses the nature and extent of the usage of payment methods and identifies and integrates variables that have the potential to determine or influence consumer payment attitudes, experiences and behaviour.
A number of perspectives on the adoption of innovations and theories on consumer behaviour are assessed in terms of their ability to inform payment method acceptance. From this a framework was proposed that attempted to capture the complexities associated with payment systems and methods and to help understand and study the payment behaviour of online consumers. This assessment is done in the light of the unique characteristics of payment methods and the factors that influence their adoption.
Initially, a Delphi study was carried out to help identify the salient attributes of payment methods. A survey was then conducted of online consumers who had purchased online and/or paid for goods and services using the Internet. The responses from 260 participants were statistically analyzed to assess their usage and preferences of payment methods alongside updated results from a purposeful interview of selected online consumers.
Online merchants and consumers demonstrate conflicting demands when it comes to payment methods. To gain a more holistic understanding of how these demands are met a qualitative study was also carried out on a small group of online merchants.
Amongst the significant findings is the fact that, despite the number of payment systems for online purchase that have been proposed and are currently available, credit cards are at present by far the most popular within the Australian market.While most consumers appear to assume that credit cards are the only way to pay at online websites, alternative payment methods offer new opportunities to both merchants and consumers. These methods have the potential to appeal to specific consumer demographics. With PayPal's broadening range of options, the promotion of debit cards for online purchases and the growing set of other payment services, online merchants and consumers now have new options and new ways to pay and get paid. The supply and demand for micro-payments and mobile payments is likely to grow but will, however, depend upon a number of factors including consumer preferences, ease of use and industry agreements and public policy.
The following position is argued in conclusion, namely, that there is need for widespread take-up of trusted, secure, privacy-protected and low-cost electronic payment methods by Australian consumers, organizations and businesses which in turn will provide opportunities to help drive online payments and produce significant productivity gains that benefit the Australian economy. Furthermore, this study provides a contribution to future research into the development and deployment of new and innovative online payment methods. Using the payment framework developed for the purposes of this research, it is envisaged that the payment card associations, payment service developers and providers, financial institutions, merchants and other stakeholders will be better equipped to understand the consumer and business imperatives of online payment methods as they evolve over the coming years, and hence increase the more widespread adoption and diffusion of online payment methods. In summary, this thesis provides new perspectives on online payment methods, specifically addressing the issues, opportunities and challenges facing merchants and consumers.
