Why consumers hesitate to pay online: Evidence from online transactions

Abstract

Purchase intention and decision turn out to be the research hotspots in the field of consumer behavior, whereas the reasons for consumer hesitation before purchase have been scarcely investigated. In order to explore the factors that affect consumers’ online purchase hesitation in the context of e-commerce retail, this study uses the theory of perceived risk to analyze how different dimensions of perceived risk dominated by consumer trust affect consumers’ purchase hesitation at the checkout stage, examines the moderating effect of consumers’ online shopping experience on the influencing process, and builds a test model with moderating variables. In this study, the factors for purchase hesitation are empirically analyzed using the methods of literature analysis and logistic regression based on the real transaction data from Taobao. The results show that seller credit rating, representing seller risk, exerts a significant adverse effect on purchase hesitation, whereas the order amount (i.e. financial risk, and price dispersion, representing product risk) positively affects purchase hesitation. The consumer experience plays a moderating role in the above process. In addition, this article further explores the heterogeneous role of buyer’s device, seller’s platform, and buyer’s gender and excludes some of the interfering factors that lead to involuntary hesitation.

JEL Classification: M31, M37