Factors affecting payment choices in online auctions: a study of eBay traders

  • Authors:
  • Han Zhang;Haizheng Li

  • Affiliations:
  • College of Management, Georgia Institute of Technology, Atlanta, GA;School of Economics, Georgia Institute of Technology, Atlanta, GA

  • Venue:
  • Decision Support Systems
  • Year:
  • 2006

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Abstract

Online payments are a critical issue in electronic markets. This research investigates online payment choices using a probit model based on survey data we collected from eBay users. We discuss payment choices made by trading partners based on risk, convenience and cost dimensions. Then, we analyze how product attributes, traders' characteristics, and payment attributes affect payment choice. Our findings suggest that product attributes, especially uncertainties associated with product quality, appear to have a stronger influence on payment choices than traders' characteristics. We also find that a seller's reputation rating does not significantly influence actual payment choices, but it does affect the payment options offered by a seller.