Consumer Confidence on the PayPal Platform - Coursework Example

SECTION 1: INTRODUCTION E-payment is an e-commerce subset that allows selling/ buying of goods and services via internet, this is an online transaction on the world wide web (american.edu, n.d.). Paypal is a an e-payment system that allows the consumer to make online instant payments to individuals and merchants as per their credit value in their online account. Our aim of the study was to find out the level of confidence in people when transacting on the paypal platform. Recent survey indicates 62% on the internet users fear online transactions, and 40% of the online payment users feel that the epayment systems need to enhance security. Further the survey indicated that 49% of the users feel vulnerable while transacting online (Oladeinde, 2014). It was due to this that we set out to study some of the factors influencing confidence in online system. We went out of the norm of security study and studied the other variables that may be affecting confidence. The aim of our study is to investigate the why people fear transactiong large amount of cash on paypal system. We set out our study on age, gender and the amount transacted to see the interations between the three with people confidence. Ho = There is low confidence in transacting large volume of money on paypal platform. Ha = There is high confidence in transacting large volume of money on paypal platform. SECTION 2: LITERATURE REVIEW Consumer confidence is a factor that depends on economic enviroment, healthy economy boosts the spending and consumer feels confidence to buy mechandize that include car, books or a vacation (William D. Perreault, 2012). Due to this spend thrift, ecommerce has defined a subset of payment known as e-payment. Consumer matrix has change with introduction of world wide web, concequently, the consumer has more heterogenoues enviroments like internet to create trust, thus trust has become a vital influence to the success of ecommerce (Theodosios Tsiakis, 2007). Thus need to study exhaustively the factors affecting trust and consumer confidence on ecommerce. Age For the online customers, the inner circles of contacts affect the purchasing decision the consumer makes. The inner cicles compromises of family and friends; and that’s how the age group defines age as factor of influence in confidence due to social commerce (Hudson, 2012). When customer wants to buy a product or a service, first the customer to recognises the problem then followed by information search, this may involve discussion with friends or age groups, ads or visit the stores and many more (PR Smith, 2011). This gives us the impetus to study the age as a factor in this research, it plays a vital role in purchasing, to further the discussion most friends even discuss the mode of payment of the goods and services. Gender The gender factor is pervalent in consumer behaviour pattern. There are magazines and ads developed targeting either sexes. This build some internal confidence amoung the sexes. They involve themselves in a discussion among the sexes. This reference group directly affects the purchasing decision of the consumer in that the consumer relies on the information provided by the gender to enhance self-image. Thus the consumer discusses the product and the mode of payment with same gender. Gender plays a role in enhancing self-confidence, consumer emulates with a particular celebrity of the same gender. Male have been reported to be more of online shoppers than the females more so the tend to conduct their online transations both at home and work. Men participate more on internet auctions and dominate most of the shopping categories except a few like clothing and health (Ruby Roy Dholakia, n.d.). Thus, the gender factor has a direct influence on the e-payment system; from the study men seem to transact more than women. The same effect can be witness on the paypal system as we are going to study. Amount The physchological factor perception plays a vital role in payment process; the process in which consumer interpret information on a e-commerce subset epayment signals the decision on what amount of money to transact on the platform (Dhruv Grewal, 2008). Thus, amount transacted signifies the ultimate confidence in the platfom, if the transactions are of low value; shows that the consumer does not trust the provider with personal data and security of consumers money. SECTION 3: METHODOLOGY The research design used for this investigation was descriptive studies, it describes the phenomena associated with population subjects , the association and interactions between the variables and propotional estimates of the population (Donald R. Cooper, 2014) . We defined our population elements as the students and employees of Regent Business School, London. We used a simple random sample in that every element in sampling frame of size n has an equal probabilty to be selected (Kuby, 2012). The data collected was analysed using Minitab, a statistical package; the data was subjected on an multiple regression linear model and simple ANOVA to determine the significance of the variables in relation to the study. SECTION 4: DISCUSSION OF FINDINGS 57% of the respondents were male. The graph show that most respondents were between the age of 20 -30 years. Interpretation Table 2.1 Model Summary S R-sq R-sq(adj) R-sq(pred) 0.606858 50.56% 44.85% 36.16% From Table 2.1 R2 = 0.51 shows a moderate relationships between the variables. Thus this shows that 49% of the factors affecting trust are not studied on this research. Table 2.2 Analysis of Variance Source DF Adj SS Adj MS F-Value P-Value Regression 3 9.7915 3.2638 8.86 0.000 Age 1 0.7776 0.7776 2.11 0.158 Gender 1 2.0773 2.0773 5.64 0.025 Amount 1 5.4254 5.4254 14.73 0.001 Error 26 9.5752 0.3683 Total 29 19.3667 Table 2.2 shows F(3,26) = 8.86 p = 0.000 thus, at significance level .05, p < 0.05, thus our model is significant and we accept the null hypothesis. Table 2.3 Coefficients Term Coef SE Coef T-Value P-Value VIF Constant 0.725 0.398 1.82 0.080 Age 0.0176 0.0121 1.45 0.158 1.29 Gender 0.503 0.212 2.37 0.025 1.40 Amount -0.000414 0.000108 -3.84 0.001 1.20 Regression Equation Trust = 0.725 + 0.0176 Age + 0.503 Gender - 0.000414 Amount We conducted a multiple regression analysis to evaluate the predicted trust level. Three predictors were subjected to the trust variable to measure there strength. All the predictors produced a significantly relation to trust index , at 72.5% , p = 0.080 indicating a strength measures in the linear combination. The amount predictor is the only bivariate correlation in negative measure with a significant of p = 0.001. The predictor gender had a strength of 50.3% with a p = 0.025 indicating that gender has a significant correlation to predicted trust. Thus by evaluating our linear model Trust = 0.725 + 0.0176 Age + 0.503 Gender - 0.000414 Amount Show that either male or female have confidence with online transaction. Age plays a vital roles, but as the amount increase the trust decreases showing that the still people have doubt of transacting large amount of cash. The graph depicts that at 0.05 level of confidence age bracket of 28 – 35 have confidence in transacting on paypal platform. Ho = Accepted. There is low confidence in transacting large volume of money on paypal platform. SECTION 5: CONCLUSIONS Discussion There is a limitation in the survey as it was conducted only on the institution premises, thus the need to widen the sampling scope population to include other respondents i.e. public and other institutions. Some of the respondents may be not have given accurate information as information sampled expecially the variable amount and age turns to be sensitive. Summary The model shows that still people don’t have confidence with transacting large volume on money on Paypal system, rather people use the platform as a way to pay simple merchandize and individual transactions. Paypal need to do more communication and marketing to win over the minds and thoughts of the consumers. Gender as a factor is a key market segment that PayPal can maximize on to get more transactions as the model indicates. Appendix 1. 1. Have ever transacted on PayPal system? Yes  No.  2. If yes, what is the maximum amount you ever transacted? _______________ 3. Do you trust PayPal system as online payment system Yes  No  I don’t know  4. What is your gender Male  Female  I prefer not to say  5. How old are you? ________________________ Works Cited american.edu, n.d. american.edu. [Online] Available at: http://www1.american.edu/initeb/sm4801a/epayment1.htm [Accessed 1 December 2014]. Dhruv Grewal, M. L., 2008. Marketing. s.l.:McGraw-Hil. Donald R. Cooper, P. S. S., 2014. Business research methods. 12th ed. New York: McGraw-Hill. Hudson, C., 2012. eBay Commerce Cookbook. 1st ed. Sebastopol,: O’Reilly Media, Inc. Kuby, J., 2012. Elementary Statistics. Boston: Cengage. Oladeinde, K., 2014. Security: Consumer confidence in online financial transactions drops. [Online] Available at: http://technologytimes.ng/security-consumer-confidence-online-financial-transactions-drops [Accessed 2 December 2014]. PR Smith, Z. Z., 2011. Marketing Communications. 5th ed. New Delhi: Kogan Page Limited. Ruby Roy Dholakia, N. K., n.d. GENDER ASYMMETRY IN THE ADOPTION OF INTERNET AND E-COMMERCE. Issue 17. Theodosios Tsiakis, G. S. G. P., 2007. Trust and Security in Electronic Payments: What We Have and Need to Know?. International Journal of Social, Management, Economics and Business Engineering, 1(5), p. 4. William D. Perreault, J. P. C. E. J. M., 2012. Essentials of Marketing. 13th ed. New York: McGraw-Hill. Read More