Short answer

Design and implement platform features and policies that demonstrably increase seller confidence in buyer legitimacy and provide recourse against fraudulent chargebacks to encourage broader participation in global online markets.

Field: Innovation & Markets
Source: Information Systems Journal (2017)
Method: Quantitative survey research
Sample: 443 sellers
Evidence: Strong effect

Sellers' trust in buyers and their perception of chargeback fraud risk are critical determinants of their willingness to engage in cross-border e-commerce transactions. This innovation & markets research insight is drawn from a 2017 study published in Information Systems Journal. Using Quantitative survey research with 443 sellers, researchers explored how this design variable affects real-world outcomes. The key design takeaway: Design and implement platform features and policies that demonstrably increase seller confidence in buyer legitimacy and provide recourse against fraudulent chargebacks to encourage broader participation in global online markets.

Study

Innovation & MarketsHigh ImpactStrong effect

Seller Trust and Chargeback Risk Significantly Impact Cross-Border E-commerce Participation

Sellers' trust in buyers and their perception of chargeback fraud risk are critical determinants of their willingness to engage in cross-border e-commerce transactions.

Information Systems Journal · 2017

Key Findings

01Sellers' trust in buyers is a significant predictor of their intention to engage in cross-border e-commerce.
02Perceived risk of chargeback fraud negatively impacts sellers' intention to trade cross-border.
03Institutional mechanisms can play a role in enhancing seller trust and mitigating perceived risks.

Application

Design takeaway

How to apply

When designing or managing an online marketplace, consider implementing buyer verification processes, clear dispute resolution protocols, and seller protection programs to address concerns about trust and fraud.

Project actions

01Consider surveying online sellers about their experiences with international transactions.
02Investigate existing trust mechanisms on e-commerce platforms and their effectiveness.

Method & Evidence

AimWhat are the key factors influencing sellers' trust in buyers and their perceived risk of chargeback fraud in cross-border e-commerce, and how do these affect their intention to trade?

MethodQuantitative survey research

ProcedureA conceptual model was developed to identify institutional mechanisms that enhance seller trust and reduce perceived risk. Hypotheses were then tested through a survey administered to sellers on a major cross-border e-commerce platform.

Sample443 sellers

ContextCross-border electronic commerce, specifically focusing on small and medium-sized enterprises (SMEs) in China trading with overseas buyers.

Variables

IV["Seller trust in buyers","Perceived risk of chargeback fraud","Institutional mechanisms"]

DVSeller's intention to trade with buyers in cross-border e-commerce

CV["Type of e-commerce platform","Seller's business size (SME)","Geographic origin of sellers (mainland China)"]

Strengths & Limitations

Strengths

+Addresses a gap in research by focusing on the seller's perspective in cross-border e-commerce.
+Utilizes a relevant context (cross-border e-commerce platform) and a substantial sample size.

Limitations

The findings might not apply to all types of online sellers or all international markets, as trust and risk perceptions can vary significantly.

Reliability & validity

The study's reliability could be assessed by the consistency of responses across similar seller profiles. Validity is supported by the theoretical model and empirical testing, though generalizability might be a concern.

Think critically

To what extent do different cultural contexts influence sellers' trust and perceptions of chargeback fraud risk in cross-border e-commerce?

Design Principles

"Facilitate secure and transparent transactional environments to foster trust and mitigate perceived risks for all parties in online marketplaces."

Understanding and mitigating sellers' concerns about trust and fraud is essential for fostering global online marketplaces. Platforms and policymakers can implement strategies to build seller confidence, thereby increasing the availability of goods and services for international consumers.

What This Means for Your Design

Online sellers are more likely to sell to international customers if they trust those customers and are not worried about being unfairly charged back for a sale.

How to use in your project

1.Use this research to justify the importance of trust and security features in your design for an e-commerce platform or service.
2.Cite this study when discussing the challenges faced by sellers in cross-border trade.

Add to My Project

Quick Cite

Paragraph starter

This research underscores the critical role of seller trust and the perceived risk of chargeback fraud in determining participation in cross-border e-commerce. Findings indicate that sellers' willingness to engage in international online transactions is significantly influenced by their confidence in buyers and the perceived security of the transaction process, suggesting that platform design and policy interventions aimed at bolstering these factors are essential for fostering a more robust global online marketplace.

Source

Information Systems Journal

To sell or not to sell: Exploring sellers' trust and risk of chargeback fraud in cross‐border electronic commerce

journal · 2017

View source

Questions About This Research

What does the research say about seller trust and chargeback risk significantly impact cross-border e-commerce participation?: Design and implement platform features and policies that demonstrably increase seller confidence in buyer legitimacy and provide recourse against fraudulent chargebacks to encourage broader participation in global online markets. Evidence: Information Systems Journal (2017).
Why does "Seller Trust and Chargeback Risk Significantly Impact Cross-Border E-commerce Participation" matter for design?: Understanding and mitigating sellers' concerns about trust and fraud is essential for fostering global online marketplaces. Platforms and policymakers can implement strategies to build seller confidence, thereby increasing the availability of goods and services for international consumers.
How can designers apply this research?: Design and implement platform features and policies that demonstrably increase seller confidence in buyer legitimacy and provide recourse against fraudulent chargebacks to encourage broader participation in global online markets.
What were the main findings?: Sellers' trust in buyers is a significant predictor of their intention to engage in cross-border e-commerce.. Perceived risk of chargeback fraud negatively impacts sellers' intention to trade cross-border.. Institutional mechanisms can play a role in enhancing seller trust and mitigating perceived risks.
What research method was used?: Quantitative survey research with 443 sellers.
How strong is the evidence?: Evidence strength is rated Strong effect, based on a 2017 journal from Information Systems Journal.
What should I do differently in my next project?: When designing or managing an online marketplace, consider implementing buyer verification processes, clear dispute resolution protocols, and seller protection programs to address concerns about trust and fraud.
What are the limitations?: The study focused on a specific platform (DHgate.com) and a particular seller demographic (SMEs in mainland China), which may limit the generalizability of findings to other platforms or seller types.