International Journal of Software Engineering and Its Applications
Vol.8, No.8 (2014), pp. 65-72
http://dx.doi.org/10.14257/ijseia.2014.8.8,07
Looking Beyond Technology: Barriers of E-Commerce Privacy in
Building E-Loyalty Intention on Internet Banking
Ahmad Al-Khasawneh
Computer Information Systems Department,
Hashemite University, Zarqa, Jordan
akhasawneh@hu.edu.jo
Abstract
Privacy is considered now a key differentiator in electronic commerce, and it is vital for
building and maintaining customer’s loyalty. Since online transactions involve many
uncertainties for the customer and most of the Internet banking offers the same product as the
other competitor, it is crucial for banks to recognize the key factor that can tie their existing
customer become a loyal customer and change the web surfers into purchaser as well which
are critical to increase the business and its profits. This paper attempts to evaluate whether
privacy issues are the major obstacles to the growth of e-commerce in Jordan. A survey
conducted for the study reveals that privacy issues are major barriers to Internet banking and
e-commerce activities among consumers.
Keywords: Information and Communication Technologies (ICTs); privacy; e-commerce;
Enterprise Development
1. Introduction
A review of the top MIS journals over the past decade shows little research that has
explicitly examined the problem of technology in developing countries, which is problematic
since half of the world lives in such nations [20]. Emerging opportunities abound as some
Arab nations begin to explore technology and telecommunications connectivity as an
economic lever for national prosperity (cf., [2]; [6]; [13]; [18].
Little research has been done to examine the ICT diffusion process in emerging economies,
particularly those of the Middle East [1]. Several studies have examined the global diffusion
of the Internet from a broad perspective, including [15] econometric global Internet diffusion
model and [9] recent digest of the Global Diffusion of the Internet study series. Yet,
prominent bodies of work focusing on global Internet and eCommerce diffusion, such as [12]
CAIS special issue on globalization and eCommerce, appear to have largely overlooked the
Middle Eastern nations. The lack of research on technology usage issues in this keenly
disadvantaged region is problematic [16]. With the notable exception of Israel ([6], Goodman
& Wolcott, 1999b), the nations of the Middle East have traditionally been some of the least
technologically-enabled economies in the world [21], hence opportunities for research and
practice abound as the developing nations in the Middle East begin to explore technology and
telecommunications connectivity as an economic lever for national prosperity (cf., [1]; [2];
[6], Goodman & Wocott, 1999a; [13]; [18]. Though the literature has ready examples of
business studies of technological acceptance and application in the Middle East, there has
been little work done on the likely use and motivations for use by the consumer Internet
ISSN:1738-9984 IJSEIA
Copyright ⓒ 2014 SERSC
International Journal of Software Engineering and Its Applications
Vol.8, No.8 (2014)
publics in these regions – probably because business use must precede commercial consumer
use of such networks in e-commerce considerations.
This research attempts to evaluate whether privacy issues are the major obstacles to the
growth of e-commerce in Jordan. Jordan, however, is a recent and shining example of a
resource-poor developing nation that has seized upon IT as a competitive differentiator to
enhance its interaction with the global business markets ([6]; [11]; [22]).
The paper is structured as follows. First, it reviews the literature on the privacy and
security issues, mainly focusing on concepts of privacy. Second, it explains the research
design, data collection protocol, and data analysis methods. Third, the findings are presented,
illustrating the incongruent interpretation of barriers of privacy. Finally, in the discussion
section, the concept of technology fears is developed and related to the case evidence.
2. Literature Review
Privacy is considered from the most important facilitator in conducting business especially
online business. People and organizations are opposed to revealing personal or business
information to others, because they are cautious from mishandling information or accessing it
illegally. But the methods and approaches of collecting information about people and
business have been developed because of customers’ desire to personally deal with them and
the high competition among online business as well [8].
Privacy refers to the characteristics and attitudes of people or any other objects like
business that are looking to keep their confidential information away from anybody else.
Other researchers defines privacy as “the interest that individuals have in sustaining a
‘personal space’, free from interference by other people and organizations” [5].
Scholars have explained four concerns associated with the privacy ([3]; & [5]):
1.
Privacy: the kind of information that is collected and held about people, and
if it is related to business or not.
2.
Accuracy: the correctness of information about people, is it correct or not?
Incorrect information will harm people.
3.
Property: the owner of information and how it can be transferred.
4.
Accessibility: the people who are authorized to access people’s personal data
and at what time and in which situation that information has to be accessed.
Other shows another viewpoint related to the privacy concerns; he makes these
concerns to customers and companies as well; “Transparency: who is collecting what
information? Security: how is information protected once it is collected by a company?
Liability: who is responsible if data are abused?” [7].
Majority of people see that privacy is a part of security, but [7] claim that they are
not the same but he acknowledges that to obtain privacy we need to have security, but
security does not guarantee our privacy. If a company has a powerful security system,
then the company joins another company to expand its business so that the two
companies will share their database leading to the exposure of our confidential
information to another company. Customer concerns about his or her privacy from four
different perspectives: the kind of information that is collected from customer, the way
that it is gathered and for what goal and purpose, the security level of gathered
information, and for how long the company gathers, uses, shares, stores and sells it to
other organizations. Therefore the company has to let customers know the type of
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Vol.8, No.8 (2014)
information that it gathers from them, and take their permission to collect information,
explain how the company uses the information as well as explain to the customers the
methods that the company uses in collecting information in order to preserve excellent
privacy practices for their customers [7].
Some companies breach customer’s privacy without using any powerful technology
or hackers to breach the network or computer security while they do indirectly through
loyal cards. Nowadays there are many non-reputable companies giving loyalty cards for
which the customers have to fill a specific application providing their personal
information [7].
2.1. Principles of Privacy
According to Allusse et al (2003, quoted in [8]) the Federal Commission of Commerce has
launched and founded four essential principles relating to the online people privacy:
•
Warning: each web site has to publish its privacy policy to show the types of
information that web site is going to collect and how it will be used.
•
Choice: the consumers have the ability and right to make a decision if they want
their information to be used, not just for transactions but for other purposes.
•
Access: the customers have the right to access their information and ensure that
their information that is collected by the web site is accurate.
•
Security: each web site has to own powerful security tools to guarantee the
integrity and security of the collected information.
These principles could be implemented through the web site in two ways: privacy policy
(policy statement) and privacy seal. Since, some web sites provide a document to the
customers or users which explain how they deal and interact with the personal information
that they have collected from people, such as, the methods that are used to collect, use, and
secure the information, as well as the purpose of collecting it [10].
2.2. Security and Privacy
It is essential to differentiate between privacy and security; privacy is related to the way
that companies use customers information (personal and financial), whereas security is related
to the methods that companies use in protecting and securing the information during
transmission as well as when it is stored in the database in order to mitigate the risk of abuse
of information, fraud and other unauthorized actions towards customers information.
Therefore privacy is not the same as security which is crucial in protecting customers’ privacy
from unauthorized people, who are trying to take advantage of it through many ways, like
implementing security tools at many places, using encryption and digital signature in
transferring information and firewalls and giving restricted access tools in database where the
information is stored.
3. Method and Procedure
The aim of this research is to test weather privacy policy and privacy seal compromise the
elements of warning, choice, access and security that are theoretically derived from principle
of privacy [8] as well as to evaluate whether privacy issues are the major obstacles to the
growth of e-commerce in Jordan. In this study, single case was chosen due to the fact that this
research attempted to collect detailed information and knowledge about customer privacy in
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Vol.8, No.8 (2014)
online banking. Samples of 500 internet users were randomly selected from various
education institutions in Jordan. A survey questionnaire was used to measure privacy issues
perception and attitude toward e-commerce and Internet banking. A survey methodology was
used to collect data of the study. In addition, demographic data such as age, gender, computer
experience and frequency of internet access were also captured. The final version of the
questionnaire was developed after issues such as ambiguity and time length to complete the
questionnaire were addressed. We designed questionnaire based on the research objectives
discussed. From 500 questionnaires distributed only 270 were collected and usable for
analysis. Existing literature were utilized and existing instruments were adapted to measure
the variables of this study to support the specification of a set of potentially strong metrics.
Respondents were asked to rate their opinion using 5-point Likert scale (1 = very important, 2
= important, 3 = neutral, 4= unimportant, 5= very unimportant) on most of the questions.
Nevertheless, questions measuring privacy intention to internet banking used a 5-point Likert
scale, rating the performance by (1 = excellent, 2 = very good, 3 = good, 4 = fair, 5 = poor),
multiple selection and close nominal measurement (1 = Yes, 2 = No). The reliability of an
instrument is most often measured by the Cronbach-alpha statistic. The Cronbach alpha value
for trust constructs is 0.903 while usability constructs is 0.921.
4. Results and Discussion
Frequency distributions were performed and found that 58% were female and 42% were
male and respondent age were in range of 20-25 years (78%) followed by 25-35 years (18 %)
of the overall total and 68% of them use the Internet daily and 70% uses the Internet banking.
4.1. Concern Over Privacy Issues
Although most of the respondent believes that using the Internet banking and shopping will
make their life easier and is more convenient. Half of them (50%) think that it is safe and
secure. The study illustrate that the customers are anxious and worried about how the online
banks collect customers’ (personal and financial information). To overcome their worries
online banks have to explain and show which ways and methods they use in collecting
customers’ information, financial and personal, through the privacy policy which appears in
the web site and every customers can see it, such as through using cookies, forms, internet
connections and other methods. The study show that customers are concerned (61%) how the
online bank interacts with their information (personal of financial). Therefore online banks
have to explain and show how the online bank interacts with this kind of information to their
customers through privacy policy, in order to increase their confidence towards their
concerns, and to increase their trust in them.
The study shows that the layout of the web site encourages customers to access and
interact with the web site (63%). So a very organized, nice, and enjoyable, designed with the
user interface systems, is very important in supporting and encouraging customers to deal
with the web site, because these things might help customers in reducing the cost of searching
and seeking for product or service which lead as a result to reduce the effort of selecting and
performing any kind of transaction. The result of this study has the same opinion with Griffith
(2001 quoted in [17]) and it claims, “Since user interface of an online store influences the
experience of consumers interacting with a retailer’s product or service offering, a welldesigned user interface system may reduce consumers’ cost of searching and the time
required for information processing”. In addition this result agrees with [19] that a powerful
web site design which helps and encourages customers to interact with it helps in obtaining
customer satisfaction in order to build and maintain the trust among customers and company.
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International Journal of Software Engineering and Its Applications
Vol.8, No.8 (2014)
Easy to read privacy policy
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
Easy to read
privacy
policy
1
Figure 1. Easy to Read Privacy Policy
The study show that 79% from the whole respondents agree that the privacy policy has to
be available in the web site in order to increase the trust between customers and web site,
because through the privacy policy customers can have a look on the company policy towards
customers’ privacy. In addition privacy policy considers one of the ways that [3] declare to
customers in order to assist them in saving and securing their privacy. Thus if customers do
not find privacy policy in the web site they will be cautious about the web site and as a result
will make them away from it. Furthermore [14] agree with this result and they claim that the
privacy policy helps especially in building customers trust towards their privacy and generally
with the web site. Figure 1 illustrate that 89% of entire respondents agree that the privacy
policy has to be written easily, in order to enable every customer to read and understand it
correctly, where as 11% disagree and do not mind. This result agrees with [7] who admit that
privacy policy has to be written without difficulty and simply in order to make it perfect.
Therefore easy writing affects positively the privacy policy.
Factors encourage people to use online
banking
Preserve…
Reputation
Convenient
Series1
Secure…
Save time
0%
20%
40%
Figure 2. Factors Encourage People to Use Online Bank
In Figure 2 where it shows the factors that encourage and help customers to use online
banking. It shows that 31% of respondents who are not using online banking might use it if
the online banking helps them in saving their times. This indicates that the online bank
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transactions have to be processed and finished quickly without any delays and any physical
behavior from customers. Furthermore convenience is another factor that supports customers
to interact with online banking, with 24% claiming that it is very important for them in order
to deal with online banking, convenience comes from easy accessing, selecting, and
performing any kind of transaction effectively and efficiently. Furthermore 26% claim that
security of transactions is very important in encouraging them to do any online transaction,
because they would need to be assured that their transactions are correctly performed.
Factors that prevent you from doing online
banking
Series1
60%
27%
Security
Privacy
1%
Procedure
Figure 3. Factors that Prevent People from Doing Online Banking
The following figure (Figure 3) shows the factors that prevent people from doing online
banking transactions; the first important one is security 60%. This result agrees with business
week (2000 quoted in [4]) which claim that 62.2% of people are willing to do online
transactions if they are convinced that the transactions are secure perfectly. Privacy concern is
the second factor that prevents people from doing online transaction, 27%, because nowadays
the result of privacy breach leads to identity theft crime where lots of people are cautious and
worried about their personal and financial information to be exposed to unauthorized people.
Finally 18% declare that the procedures of how to do online transaction could be another
factor preventing customers from undertaking online transactions.
Linear Regression analysis was used to test relationship between independent (intention to
use Internet banking) and dependent variable (online people privacy). In this analysis, the
dependent variables were the four design factors (Website warning and choice; Access and
security) and the independent variable is (intention to use internet banking). From this
analysis, the R² value can be obtained. Table 1 reports the linear regression analysis results
for the relationship of Website warning and choice Access and security constructs toward
customer online banking.
Table 1. Variables Testing
Model
Privacy Policy (Website warning and
choice) and intention to internet
banking
Privacy Seal (Access and security) and
intention to internet banking
70
R²
0.109
F Value
1.790
t
1.336
Significant
Significant
0.087
1.145
1.070
Significant
Copyright ⓒ 2014 SERSC
International Journal of Software Engineering and Its Applications
Vol.8, No.8 (2014)
The result shows that privacy policy website design dimension was more significant with
customer online banking loyalty rather than privacy seal dimension. From this results we can
conclude that privacy policy factor has relatively more important than privacy seal factor in
building customer online loyalty in Internet banking environment. The higher respondents’
perceived privacy policy website design on Internet banking websites, the higher their
intentions to purchase and revisits from those websites. Bivariate Correlation analysis was
used to test whether privacy policy website design significantly have relationship with
customer privacy seal on website. From the analysis, privacy policy website design was
highly significance with privacy seal on the website with p value = 0.005. The findings show
that consumers’ the higher they perceived privacy policy website design on the Internet
banking, the higher their privacy seal towards the website, which will eventually affect their
attitudes toward their like hood to held commitment for certain services provides online and
positive online loyalty behaviour. In addition, their attitudes toward websites affect their
future intentions to use the same Internet banking websites rather than other Internet banks.
Privacy policy factor was found to be the important factor than privacy seal. In other words,
consumers may stay with a company’s products through the Website warning and choice that
they get from websites. In new paradigm of building relationship with customer, privacy seal
was no longer the main factor for customer’s usage of internet banking.
5. Conclusion
The study concludes that researchers need to consider the fear factor in order to achieve
effective internet banking loyalty. As the internet enables and creates new marketplace for all
kinds of business, the companies which are interested in conducting business online should be
aware of the security and privacy because they have a very positive impact on the success of
any kind of business on the internet. The companies should take into consideration many
factors when conducting business on the internet in order to be successful, for example, they
should consider that, if the company has a powerful security system it does not mean that it
preserves the privacy of the company and customers, and also trust does not mean loyalty and
vice versa. The company which has a good reputation and a brand name certainly has a
powerful privacy system. In addition, the marketing and advertising of the security and
privacy tools and functions that the company has implemented in its web site are important in
increasing their confidence towards the security. In future studies, researchers may find other
dimensions of technology fears in other contexts, using different information systems
theories.
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Author
Ahmad Al-Khasawneh is an Associate Professor of Computer
information system at Hashemite University and was a director of
eLearning Center. He holds the PhD and M.Sc. of information and
software systems and technology from Newcastle University,
Australia and B.S in computer and automatic control engineering.
He has involved in many presentations and workshops. Dr.
Khasawneh has 20 years of experience in ICT field and in ICT
applications and acts as technical advisor to the Royal Jordanian
Airlines director on issues related to the development of travel
industry and ICT strategy. Prior to joining the Hashemite University
of Jordan, he held several key positions with major international ICT
consultancy and solutions firms and lecturer in IT related topics at
Newcastle University, Australia. Currently, he is the dean of the
Prince Hussein Bin Abdullah II for Information Technology at
Hashemite University.
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