An Agenda For Research About The Value Of Payment Systems For Transactions In Electronic Commerce

The growth of electronic commerce (EC) may be impeded because payment systems (PS) designed for offline commerce have been adapted for online use, but without all of the information contained in physical meetings among transaction parties. Resulting problems add costs to transactions and affect profitability for EC transactions. New PS have been developed and are in various stages of theory, development, and rollout, but none have been widely adopted by users. Here we identify eleven generic characteristics of PS and nine of transactions, the interaction of which is expected to affect the cost of completing an online transaction. We use a review of literature, as well as focused group and individual interviews, to develop 35 propositions for how interactions between PS and transaction characteristics affect the transaction costs. Finally, we propose a research agenda to determine the importance of each proposition, the functional form of its impact on cost, and to design effective sets of PS for online transactions.