1. 2000 Conference on Emerging Issues in International Accounting J. Efrim Boritz School of Accountancy © 2000. J. E. Boritz. All rights reserved Trust on the Internet

2. U of W Centre for Information Systems Assurance http://www.arts.uwaterloo.ca/ACCT/uwcisa

3. Agenda Trust on the Internet Trust Theories Building Trust Barriers to Trust Surmounting the Barriers

4. Trust on the Internet Survey findings: >300 million people use the Internet today (50% US) 40% have purchased online within month (60% in US) 25% of purchases impulsive 10% have personalized a web page users don’t trust companies that collect data on Internet many browsers provide fake information online shoppers more brand loyal than offline shoppers

5. 75% of Internet companies will not be around in 5 years unskilled hackers like “Mafiaboy” can disable major sites like CNN.com and Amazon.com Trust on the Internet

6. Trust Theories Economics Psychology

7. Economics of Trust Figure 1: The Trust Game S < P < R < T (Snijders and Keren 1999, 356)

8. Psychology of Trust Perceived Size Perceived Reputa’n Trust in Store Willingness to Buy Perceived Risk Attitude Jarvenpaa et al. 2000, p. 47

9. Barriers to Trust Size $ Sales # customers # hits Reputation Local Global Attitudes General Specific: Absence of physicality Risk Security Privacy Transaction non-fulfilment

10. General Tecchies play by different rules Ownership of data Fear of spam Low capital requirements: “anybody” can play Here today, gone tomorrow

11. Absence of physicality Absence of human interaction Inability to see/feel product Unreliable cues about quality, trustworthiness of e-commerce entity (anybody can have a good looking website)

12. Security Credit card abuse Access/modify/destroy user information Non-repudiation Integrity completeness, accuracy, timeliness, authorization of transactions

13. Privacy IP addresses, cookies, clickstreams, registration data, etc. Data warehousing/Data mining Cross-referencing/Profiling Opt-out vs. Opt-in Ownership of data Spam

14. Transaction Non-Fulfilment Goods out of stock Non-delivery Incorrect shipment Split orders Shipping costs Returns

15. Trust’s 3C’s Create Confirm Continue

16. Studio Archetype and Cheskin, 1999

17. Surmounting the Barriers Branding/BIRGing Proximity (Word of mouth, personal, etc.) Familiarity (Contact frequency, communication) Predictability (Track record: site, category) Accreditation (Experts, seals, etc.) Number of information sources Regulation

18. Privacy Practices Privacy statements Positive opt in Collect only essential information Do not resell Zero knowledge systems Spam filters

19. Security Technology Login Userids/Pswds identification authentication authorization Digital certificates SSL (Encryption) E-wallets

20. simple fast service-oriented navigable shopper friendly community global perspective fulfilment Design & Configuration

21. Communication Source, message, recipient Voluntary by companies rather than forced by regulation Toll free number Email

22. Seals & Rating Systems Truste.com BBBOnline.org WebTrust ADDSecure.net ICSA.net WABureau.com WebWatchdog MultiCheck BizRate Gomez epinions.com comparenet.com planetfeedback.com Consumer Reports Yahoo Amazon etc

23. Comparison of Seals 1

24. Comparison of Seals 2

25. Regulation Self-regulation hodge podge of inconsistent practices ineffective regulations scandals: RealNetworks, Doubleclick Government COPPA, CIPA, OPPA “complaints@us.gov”

26. Thank You Questions?