Trust and Security in Online Business

Trust, plays a crucial role in online business which is characterised as virtual (Yoon, 2002) and has higher degree of uncertainty of transactions (Roca, García and de la Vega, 2009), as compared to traditional ones. This blog post critically analyses the relationship between trust and security in an online business. Security threats and trade-off experienced by the online business are also discussed. Finally, this blog post recommends both enterprises and consumers to transfer the risks of online payment to the third party.

 

Trusts and Security in Online Business

 

Perceived trusts, usefulness, and ease of use determine consumers’ intention in the online business (Roca, García and de la Vega, 2009). According to Sutanonpaiboon and Abuhamdieh (2008) the dimension of trust is not only trusting in another party (competence, benevolence, and integrity), but also trusting in the medium of the transaction which consists of physical (internet connectivity) and the virtual components (the websites). These need to be ensured and incorporated throughout the online business process.

 

Flavián and Guinalíu (2006) argue, consumers’ perceptions toward the websites’ security in handling their private data influence their trusts. For processing the payment, an online business, like Amazon, usually request consumers to input credit or debit card numbers which also include personal information. After the data are transferred to and processed by the online merchant, the consumers may lack control over them (Hoffman, Novak and Peralta, 1999). Hence, consumers’ perception of the online business’ high security system would accelerate their trust, which makes them disclose personal and financial information.

 

 

Threats and Trade-off

 

Security threats toward online business transactions are increasing every year. They are categorised into; denial of service (DOS) which consists of spamming and viruses; unauthorised access including passive and active; and theft and fraud which usually involve data (Niranjanamurthy and Chahar, 2013). Specifically, Symantec (2016) reports, the increased threats including data breaches (by 23%), spear-phishing campaigns (by 55%), and ransomware (by 35%). The real numbers are expected much higher than those as many companies chose not to reveal the cyberattacks they experienced. Presumably, they are concerned about their impacts towards stock value, consumers perception or potential liabilities emerge (Javers, 2013).

 

Williams (2007) suggests online businesses invest on some security technologies such as SSL, encryption, reverse firewalls, etc. Nevertheless, their instalments are costly and high-maintenance. Small medium enterprises typically do not have resources for these as compared to large companies, which make them more vulnerable to the cyberattacks (Paulsen and Toth, 2016). Their full utilisation may also cause the website becomes more uneasy to use and even decrease performance by 75% (Kerravala et al., 2015). Aimed to improve the security, the online business may potentially sacrifice consumers’ convenience and even some transactions.

 

 

Conclusion and Recommendation

 

Trust, is an ultimate driver in online business. It is strongly determined by consumers’ perception of the online security system. In fact, instalment of high-security systems is crucial as the increased of security threats. Some trade-offs of the instalment might be experienced, in particular by small medium enterprises. As an alternative, for processing the payment, it is recommended that both the online businesses and consumers transfer the risks of online payment to the third party who manages the funds of the parties involved in a transaction such as PayPal, Alipay, Google Wallet, etc (Laudon and Traver, 2016) .

 

 

References:

 

Flavián, C. and Guinalíu, M. (2006) Consumer trust, perceived security and privacy policy. Industrial Management & Data Systems [online]. 106  (5), pp. 601–620. Available from: http://www.emeraldinsight.com/doi/10.1108/02635570610666403doi:10.1108/02635570610666403.

 

Hoffman, D.L., Novak, T.P. and Peralta, M. (1999) Building consumer trust online. Communicatio of the ACM. 42  (4), . doi:10.1145/299157.299175.

 

Javers, E. (2013) Cyberattacks: Why Companies Keep Quiet. Available from: http://www.cnbc.com/id/100491610 [Accessed 1 July 2017].

 

Kerravala, Z., Turner, R., Campbell, N., Metzler, J., Maurer, R. and Smithers, R. (2015) Industry Experts Speak Out: The Network Performance and Security Trade-Off [online]. Available from: http://www.webtorials.com/content/2015/03/industry-experts-speak-out-the-network-performance-and-security-trade-off.html.

 

Laudon, K.C. and Traver, C.G. (2016) E-commerce 2016: Business, Technology, Society. 12th edition. (no place) Pearson Education, Inc.

 

Niranjanamurthy, M. and Chahar, D. (2013) The study of E-Commerce Security Issues and Solutions. International Journal of Advanced Research in Computer and Communication Engineering. 2  (7), pp. 2885–2895.

 

Paulsen, C. and Toth, P. (2016) Small Business Information Security: The Fundamentals Small Business National Institute of Standards and Technology Interagency Report [online] 7621. Available from: https://doi.org/10.6028/NIST.IR.7621r1doi:10.6028/NIST.IR.7621r1.

 

Roca, J.C., García, J.J. and de la Vega, J.J. (2009) The importance of perceived trust, security and privacy in online trading systems. Information Management & Computer Security [online]. 17  (2), pp. 96–113. Available from: http://www.emeraldinsight.com/doi/10.1108/09685220910963983doi:10.1108/09685220910963983.

 

Sutanonpaiboon, J. and Abuhamdieh, A. (2008) Factors Influencing Trust in Online Consumer-to-Consumer (C2C) Transactions. Journal of Internet Commerce [online]. 7  (2), pp. 203–219. Available from: http://www.tandfonline.com/doi/abs/10.1080/15332860802067706doi:10.1080/15332860802067706.

 

Symantec (2016) Internet Security Threat Report [online] 21 (April). Available from: http://linkinghub.elsevier.com/retrieve/pii/S1353485805001947.

 

Williams, G.B. (2007) Online Business Security Systems.  London: Springer.

 

Yoon, S.J. (2002) The antecedents and consequences of trust in online-purchase decisions. Journal of Interactive Marketing. 16  (2), pp. 47–63. doi:10.1002/dir.10008.