Are All Commercial Websites Created Equal? Web Vendor Reputation and Security on Third Party Payment Use

New web vendors emerge daily as business-to-consumer e-commerce grows substantially over the years. However, new web vendors may be regarded with skepticism in an existing marketplace, and may require third party support to reduce uncertainty. This study investigates the effect of consumer’s perceived security and reputation of web vendors on consumer’s purchase intention and third party payment choice. Our study examines under what condition adopting a reputable third party payment system is beneficial to web vendors. Applying trust transference theory, we found that website with high reputation and high security may not benefit from having a third party payment presence, while website with low reputation and low security will benefit the most for having an alternative financial payment mechanism. Our study also found that online consumers tend not to choose to use third party payment system when the website is perceived as high security regardless of the reputation of the website.