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Trust in E-Commerce Topic 9. Introduction. Trust & Risk. Strategic Thrusts. Framework of Trust. Conclusion. Related Web Sites. Questions. What is Trust? Definition

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  • Trust & Risk

  • Strategic Thrusts

  • Framework of Trust

  • Conclusion

  • Related Web Sites

  • Questions


What is Trust?

Definition

“the assured reliance on the character, ability, strength, or truth of someone or something, or one in which confidence is placed”.

Trust & Risk

Web Sites

Questions


The above cartoon by Peter Steiner has been reproduced from page 61 of July 5, 1993 issue of The New Yorker, (Vol.69 (LXIX) no. 20)only for academic discussion, evaluation, research.


Quote from jeff sandquist com

On the Internet nobody knows you are a dog page 61 of July 5, 1993 issue of The New Yorker, (Vol.69 (LXIX) no. 20)only for academic discussion, evaluation, research.

Tuesday, July 27, 2004

Fascinating how this famous cartoon from The New Yorker cartoon is proving less true as more and more folks get Weblogs. Weblogs give us an insider view of corporations and let us learn more about the individuals.

Could the day arrive when we know for sure if you're a dog or not?

Quote From Jeff Sandquist.com


Who are you

'Who are you?' said the Caterpillar. page 61 of July 5, 1993 issue of The New Yorker, (Vol.69 (LXIX) no. 20)only for academic discussion, evaluation, research.

This was not an encouraging opening for a conversation. Alice replied, rather shyly, 'I - I hardly know, sir, just at present - at least I know who I was when I got up this morning, but I think I must have been changed several times since then.'

—"Alice's Adventures in Wonderland", Lewis Carroll.

Who are you?


Identity (brick & mortar store) page 61 of July 5, 1993 issue of The New Yorker, (Vol.69 (LXIX) no. 20)only for academic discussion, evaluation, research.

Immediacy (physically touch the product)

Value (can evaluate since close at hand)

Discourse (talk to a salesman in person)

Community (words of mouth)

Privacy (pay cash)

In the traditional setting, handshaking often symbolizes a transaction

In the Internet context, it is not possible

Trust in Traditional Commerce

Trust & Risk

Strategic Thrusts

Framework

Conclusion

Web Sites

Questions


Is the site professional? page 61 of July 5, 1993 issue of The New Yorker, (Vol.69 (LXIX) no. 20)only for academic discussion, evaluation, research.

Does the information architecture make sense?

Is the site easy to navigate?

Is the site easy to use?

Are my questions answered?

Do other people trust this site?

Am I familiar with this company?

Are the prices reasonable?

What Consumers Look For to Evaluate Trustworthiness online

Strategic Thrusts

Framework

Conclusion

Web Sites

Questions


Trust is not associative (non-symmetric) page 61 of July 5, 1993 issue of The New Yorker, (Vol.69 (LXIX) no. 20)only for academic discussion, evaluation, research.

Trust is not transitive

Trust is always between exactly 2 parties

Trust will involve either direct trust or recommender trust

Some Properties of Trust

Trust & Risk

Strategic Thrusts

Framework

Conclusion

Web Sites

Questions


Trust and risk are closely interrelated page 61 of July 5, 1993 issue of The New Yorker, (Vol.69 (LXIX) no. 20)only for academic discussion, evaluation, research.

Risk is defined as a consumer’s perception of the uncertainty and adverse consequences of engaging in an activity

When risk is present, trust is needed to make transactions possible

Doing business on the Internet has many additional risks

Trust and Risk

Introduction

Strategic Thrusts

Framework

Conclusion

Web Sites

Questions


Email best practice

Some of the things to consider when sending emails are discussed in this ZDNET article.

Email – Best Practice


Collaboration and trust

Open source software is based on trust e.g. discussed in this Mozilla

Wikis

Blogs

How else can you collaborate?

Collaboration and Trust


Financial (risk of losing money or paying too much) discussed in this

Functional (risk of receiving the wrong or a malfunctioning product)

Social (risk of using a product that reflects poorly on its user)

Physical (risk that we might be harmed by the product)

Higher consumer trust towards an Internet store will reduce the perceived risks associated with buying from that store

Four Types of Risk

Introduction

Strategic Thrusts

Framework

Conclusion

Web Sites

Questions


Reputation and size are key factors discussed in this

Long term reputation is far more than short-term product quality movements

Reputation and size provide assurances

Assurances help to increase trust, particularly when parties have not interacted before and do not have first hand knowledge of each other

The store’s perceived reputation is positively associated with a consumer’s trust in an Internet store

The store’s perceived size is positively associated with a consumer’s trust in an Internet store

Factors of Trust

Introduction

Strategic Thrusts

Framework

Conclusion

Web Sites

Questions


Higher consumer trust toward an Internet store will generate more favourable attitudes towards shopping at that store

The lower the consumer’s perceived risk associated with buying from an Internet store, the more favourable the consumer’s attitudes towards shopping at that store

Favourable attitudes towards an Internet store will increase the consumer’s willingness to purchase from that Internet store

Reduced perceived risks associated with buying from an Internet store will increase a consumer’s willingness to purchase from that Internet store

Outcomes of Trust

Introduction

Strategic Thrusts

Framework

Conclusion

Web Sites

Questions


Five key strategic thrusts: more favourable attitudes towards shopping at that store

Establishing a secure e-Commerce environment

Building confidence in E-businesses

Building confidence in consumers to transact on the Internet; and

Educating and increasing awareness of the benefits of E-Commerce

Best practices for E-Commerce to increase trust

Key Strategic Thrusts to Build a framework of trust

Introduction

Trust & Risk

Framework

Conclusion

Web Sites

Questions


People need to be confident of the identity of the person sending electronic messages, to be sure that they have not been tampered with, and that they have been kept confidential.

Senders would want to be able to identify the recipients of the messages, to ensure that they will not land on the hands of the unauthorized.

Secure electronic transactions can be provided through the use of encryption technologies and certification authorities.

Establishing a secure E-Commerce Environment

Introduction

Trust & Risk

Framework

Conclusion

Web Sites

Questions


Approaches sending electronic messages, to be sure that they have not been tampered with, and that they have been kept confidential.

Security

Secure Socket Layer

S-HTTP, s/MIME

Identification

Challenge-Response System

Authentication

Secure Electronic Transaction (SET)

Secure Electronic Payment Protocol (SEPP)

Secure Transaction Technology (STT)

PKI/Digital Certificates

Authorization

Open Profiling Standard for Authorization and Single Sign-On (OPS)

Establishing a secure E-Commerce Environment

Introduction

Trust & Risk

Framework

Conclusion

Web Sites

Questions


Risk is unavoidable, but doing E-Business is perceived to have greater risks.

Some banks impose higher transactional fees for online payments (risk premium)

E-Merchants are required a fixed term (e.g. six month) deposit to cover possible charge backs arising from online transactions.

Approach: Risk Assessment and Profiling

Establishing a secure E-Commerce Environment

Introduction

Trust & Risk

Framework

Conclusion

Web Sites

Questions


E-Commerce brings about new markets, more customers and global reach.

Businesses are hesitant to exploit opportunity which can be accompanied with an increased risk of network fault, online fraud and crime.

Businesses also worry about capital investment that might become outdated through rapid technological obsolescence.

Approach: Introducing E-Commerce Insurance & Underwriters

Building Confidence in

E-Business

Introduction

Trust & Risk

Framework

Conclusion

Web Sites

Questions


When a credit card fraud occurs, the e-business will lose its good, be charged for the costs and have to pay the issuing bank a charge-back fee

Online consumers also face the risk that they may not receive the goods, the goods that arrived are not what they had ordered or the goods are damaged upon receipt and even DOA (dead on arrival).

Approach: Escrow Services

Building Confidence in

E-Business

Introduction

Trust & Risk


There will be potential e-disputes when doing business online, thus there is a need for an alternative dispute resolution process to allow businesses and consumers to have access to an independent and efficient way of resolving complaints.

Approach: Alternative Dispute Resolution (ADR) Mechanisms

Building Confidence in

E-Business

Introduction

Trust & Risk

Framework

Conclusion

Web Sites

Questions


For consumers to transact on the Internet, they must have trust that the site keeps information private and offers a secure site for them to purchase products

Consumers fear the risk of financial losses due to theft or fraudulent use of credit cards, or orders that disappear and products that never arrive.

Approach: Trust Marks

Building User Confidence in E-Commerce Transactions

Introduction

Trust & Risk

Framework

Conclusion

Web Sites

Questions


Verisign has developed and is promoting a set of principles and criteria (On-Line Privacy, Security, Business Practices and Transaction Integrity, Availability, WebTrust for Certification Authorities)

Independent auditing can provide assurance services to evaluate and test whether a particular E-Commerce site meets these principles and criteria

The WebTrust seal of assurance can be displayed on the E-Commerce site if it meets these principles and criteria

Example site: eBay, Commonwealth Bank

Building User Confidence in EC Transactions - WebTrust

Introduction

Trust & Risk

Framework

Conclusion

Web Sites

Questions


http://www.eBay.com.au and criteria (On-Line Privacy, Security, Business Practices and Transaction Integrity, Availability, WebTrust for Certification Authorities)

http://www.anz.com.au

http://www.ozrural.com

http://www.paypal.com.au

Introduction

Trust & Risk

Framework

Conclusion

Web Sites

Questions


Reliability Seal Program and criteria (On-Line Privacy, Security, Business Practices and Transaction Integrity, Availability, WebTrust for Certification Authorities)

Makes a commitment to high levels of ethical business practices and customer satisfaction.

Has been in business for more than a year.

Has a satisfactory record with the Better Business Bureau.

Commits to work with its customers and the Better Business Bureau to resolve disputes that might arise.

Privacy Seal Program

The BBBOnLine Privacy program was developed specifically to help business web sites address this key concern of online shoppers.

Example site: Dell Computer

Building User Confidence in EC Transactions - BBBOnline

Introduction

Trust & Risk

Framework

Conclusion

Web Sites

Questions


See Dell and criteria (On-Line Privacy, Security, Business Practices and Transaction Integrity, Availability, WebTrust for Certification Authorities)

BBonline

Trust e

Verisign

See Nikon bonded information

Introduction

Trust & Risk

Framework

Conclusion

Web Sites

Questions


Deals with privacy concerns of users. Its goal is to provide:

Online consumers with control over their personal information

Internet publishers with a standardized, cost-effective solution for both satisfying the business model of their site and addressing consumers’ anxiety over sharing personal information online

TRUSTe seal will take users directly to a company’s privacy statement

Example site: MSN

Building User Confidence in EC Transactions - TRUSTe

Introduction

Trust & Risk

Framework

Conclusion

Web Sites

Questions


Program Principles: provide:

Adopting and implementing a privacy policy that factors in the goals of the individual web site as well as consumer anxiety over sharing personal information online

Posting notice and disclosure of collection and use practices regarding personally identifiable information via a posted privacy statement

Giving users choice and consent over how their personal information is used and shared

Putting data security and quality, and access measures in place to safeguard, update and correct personally identifiable information

Building User Confidence in EC Transactions - TRUSTe

Introduction


Minimum requirements of the TRUSTe privacy statement: provide:

What personal information is being gathered

Who is collecting the information

How the information will b used

With whom the info will be shared with

The choices available to users regarding collection, use, and distribution of their info

The security procedures in place to protect personal info from loss misuse, or alternation

How users can update or correct inaccuracies in their pertinent info

Building User Confidence in EC Transactions - TRUSTe

Introduction

Trust & Risk

Conclusion

Web Sites

Questions


TRUSTe Oversight: provide:

Initial and Periodic Review

Review website for adherence to the TRUSTe principles, privacy statement requirements and trustmark usage.

Seeding

TRUSTe submits unique user information and monitor results for any wrongdoing

Online Community Monitoring

The ability of the community at-large to report violations by establishing online Watchdog reporting form for users. Licensee privacy statement must also display the TRUSTe “click to verify seal” which links to a verification page located on TRUSTe’s secure server.

Building User Confidence in EC Transactions - TRUSTe

Introduction

Trust & Risk

Framework

Web Sites


TRUTEe Resolution Process provide:

Request users to contact website directly before filing a report with TRUSTe

If there is no satisfactory response, TRUSTe steps in as the liaison between the consumer and website to resolve the issue.

If the website is in violation and is verified by TRUSTe’s official auditors, TRUSTe will advise and guide the licensee on the steps to remedy the problem

If no action taken, then it will result in revocation of the TRUSTe trustmark

Building User Confidence in EC Transactions - TRUSTe

Introduction

Trust & Risk

Web Sites

Questions


Issues provide:

Narrow Focus

Web only, what about e-mail and other channels?

Potential conflict of interest

Depends on corporate sponsors which are also users of TRUSTe

Self violation

Allowed a third party – thecounter.com – to track visitors to its web site through a collection of personally identifiable information

Building User Confidence in EC Transactions - TRUSTe

Introduction

Framework

Web Sites


The ease with which personal information can be disseminated with the proliferation of IT has raised privacy concerns worldwide.

Approaches: Addressing privacy concerns

- Policy for Cookies should be made known to the users

- Policies regarding any practices that involve using record of user accesses for statistics generation and/or debugging, should also made known to the users

- Platform for Privacy Preferences Project (P3P)

Building User Confidence in E-Commerce Transactions

Introduction

Trust & Risk

Framework

Questions


P3P (W3C’s Platform for Privacy Preferences Project) with the proliferation of IT has raised privacy concerns worldwide.: A framework for informed Internet interactions. The goal of P3P is to enable Internet sites to express their privacy practices and users to exercise preferences over those practices

Approach: Each Internet site has a proposal for privacy policies. If a proposal matches the user’s preference via WWW user-agents, then accept. Otherwise, reject. Sites can use P3P to increase the level of confidence

Building User Confidence in E-Commerce Transactions

Introduction

Trust & Risk

Web Sites


Approaches: The government introduces initiatives to help educate and increase awareness of E-Commerce for the businesses and consumers.

Encouraging the fostering of an e-lifestyle amongst the people

Creating E-Commerce awareness through seminars targeting at businesses

Publicly awarding businesses that adopted E-Commerce successfully

Educating and Increasing Awareness of the Benefits of E-Commerce

Introduction

Trust & Risk

Profile

Conclusion


Seals of Approval: Re-assure the consumers that security has been established

Brand: The E-Merchant’s promise to deliver specific attributes and its credibility based on reputation & consumers’ previous experience

Navigation: Ease of finding what the consumers want

Fulfillment: Clearly indicates how orders will be processed, and provides information on how to seek recourse if there are problems

Presentation: Design attributes that exhibit quality and professionalism

Technology: State of the art even it is expensive and difficult to use

Best Practices for E-Businesses to Increase Trust

Introduction

Trust & Risk

Framework

Conclusion

Web Sites

Questions


Introduction been established

Putting all the key strategic thrusts together

To build a framework of trust

Gartner Article (Lost Sales)

Trust & Risk

Strategic Thrusts

Conclusion

Web Sites

Questions


An Online Trust Framework been established

(Simple Model)

Introduction

Trust & Risk

Strategic Thrusts

Conclusion

Web Sites

Questions


Technology Dimension been established

Security, Authentication, Identification, Authorization

Non-repudiation

Confidentiality of Transactions

Tools

PKI/Digital Certificates

Challenge Response

SSL, S/MIME

SET, SEPP, STT, OPS

Key Strategic Thrust: To establish a secure E-Commerce Environment

A Framework of Online Trust

Introduction

Trust & Risk

Strategic Thrusts

Conclusion

Web Sites

Questions


Market Place Dimension been established

Privacy Services (e.g. P3P)

Alternative Dispute Resolution (ADR) Mechanisms

E-Commerce Insurance & Underwriters

Escrow Services

Credit Bureau Services

Alternative Dispute Resolution (ADR) Mechanisms

Trust Marks

Key Strategic Thrusts:

To build confidence in EC

To build user confidence in EC Transactions

Best Practices

A Framework of Online Trust

Introduction

Strategic Thrusts

Conclusion

Web Sites


Market Participant Dimension been established

Risk Assessment & Profiling

Fostering e-commerce lifestyle, e-commerce seminars for consumers, etc.

Brand, Effective Navigation, Fulfillment & Presentation

Key Strategic Thrusts:

To establish a secure E-Commerce Environment,

To build confidence in EC

To build user confidence in EC Transactions

To educate and Increasing Awareness of the Benefits of E-Commerce

Best practices

A Framework of Online Trust

Introduction

Conclusion

Web Sites


Consistent Legal Framework is important been established

Country specific but EC is global

Conflicting views create confusion and friction in the E-Commerce

A sound global legal framework plays a vital role in restoring confidence in the mind of customers.

Approach: United Nation’s Committee on International Trade and Law (UNCITRAL) should take initiative to find a global acceptable solution for the legal framework

A Legal Framework

Introduction

Web Sites

Questions


A detailed Online Trust Framework been established

Introduction

Trust & Risk

Strategic Thrusts

Conclusion

Web Sites

Questions


Web 2 0 you as the new dimension

Going beyond commerce, who do you trust? been established

Consider this map

Next week….

Web 2.0 – YOU as the new dimension


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