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Trust in E – Commerce sample essay


The composition of this essay will concentrate on the topic about Trust in E-Commerce. Hence, this would focus in rendering a clear understanding on how such trust in E – Commerce would work in the actual practice of electronic business. The completion of this essay is up to provide general information about the importance of trust in E – Commerce.

In addition to this, it will give an evident rationale in the primary functions of trust in actual practice of business in E – Commerce. Moreover, this paper holds on the purpose of providing comprehensive details on trust in E – Commerce.

The following will be discussed:
1. A Brief Back Ground: Trust in Online environment
2. Importance of Trust in E – Commerce
3. Major Risks in E-commerce
4. Arguments, Issues and More
At the end of the paper, its goal includes determining the importance of trust in the practice of E – Commerce. Nevertheless, this essay would work to tackle prominent issues about E – Commerce with regard to trust.

The Definition of Trust in an Online Environment

Singh (1996) differentiates between two types of trust, which is that of soft trust and hard trust. Under the concept of soft trust, the important elements are that which “involve human psychology, brand loyalty, and user-friendliness” (Bollier 1996: 21 as cited in Singh 1996: 145). On the other hand, that of hard trust has factors, which “involve authenticity, encryption, and security in transactions” (Bollier 1996: 21 as cited in Singh 1996: 145).

There is distinction that is to be made between the two that is the main reason for its separation. However, both sets of factors enable the users to have a sense of trust in a virtual environment where the virtual characteristic of the online environment has produced uncertainties.

Likewise, it is to be noted that the factors included for the “soft trust” involves those which are relative to the customers and are points where the online environment interacts with the users. These are the things, which are related to the client and would vary from every user. On the other hand, those elements under the category of hard trust leans towards those characteristics of the online environment which the users look for and which the different participants in the online environment should provide and possess in order for trust to be built.

Moreover, Sutherland and Tan (2004) define trust as the element of the users that allow them to be vulnerable and take risks. It results to their acceptance of both the positive and negative consequences of their use of the online environment. The level for such may vary from one person to another depending on the elements of hard and soft trust placed above.

Figure 1. E-Commerce Diagram for Secure Transactions

Importance of Trust in E – Commerce

Trust in a sense has always been significant aspect in doing business (The Importance of Trust and Credibility n.d.). Hence, establishing trust and credibility is a helpful way to gain the confidence of consumers or the customers (The Importance of Trust and Credibility n.d.). In sales, establishment of such trust is an efficient way to reach higher rate of sale (The Importance of Trust and Credibility n.d.). Likewise, trust and credibility is significant in building firm relationship with consumers and attract potential customers or buyers in the future (The Importance of Trust and Credibility n.d.).

The E-commerce is a type of a socio-technical system in exchanging business data and information, upholding business relationships, and accomplishing business transactions through the used of telecommunications networks (E – Commerce Relationships n.d ). In literature, trust is commonly characterized as the confidence or predictability in individual’s potentials (Pavlou n.d ) and the confidence or faith in others goodwill (Trust in Electronic Environment n.d.).

In the practice of E – Commerce, trust is considered to be the focal point of creating a firm relationship with the clients or the consumer (E – Commerce Relationships n.d.). This is due to the fact that in such environment the presence of risks, uncertainties, and interdependencies are prevalent (E – Commerce Relationships n.d.). Hence, such trust in the field of E – Commerce is significant for the fact that it serves as the key factor in establishing social capital (On-line trust: concepts, evolving themes, a model n.d.).

In addition to this, trust in E-commerce is important in achieving positive outcomes or results such as improving supplier performance, attaining consumer’s satisfaction increasing competitive advantages, and other substantial economic achievement (Building E-commerce Trust Applying Usability Principles n.d., eCommerce and the electronics industry n.d.). In citation of these facts and information it is reasonable enough to say that such trust in the field of E –Commerce is proven to be significant and effectual in many ways.

Moreover, apart from the significance of trust in E –Commerce, it also entails positive benefits. Such reward of trust is measurable in a broader range in E – Commerce such as reducing the transaction costs, endorsing advantageous behaviors to attract and limiting the extent of formal contracts (E – Commerce Relationships n.d., Egger n.d.). Nonetheless, trust plays a significant role in e-commerce due to the scenarios like lack of physical proximity, inefficiencies in web technology, anonymity, potential opportunism and lack of control (E – Commerce Relationships n.d.).

Major Risks in E-commerce

With the speedy development and improvement of technologies, more specifically that of the Internet, it is a fact that this entails a broader range of significant and new opportunities (Hunter n .d.). However, such new opportunities have come with new risks that are commonly not included in the company’s actual risk management strategy (Hunter n .d.).

Likewise, the utilization of risk management has been part of the part of the business industry and is widely implemented in such environment (Hunter, n .d.). This is in support of protecting the company’s tangible assets that are exposed to different perils or risks (Hunter, n .d.). Thus, in the field of E –Commerce, such management strategy relies more in the use of technology such as the internet (Hunter, n .d.). Nonetheless, with the appropriate and accorded utilization of such risks management program, possible perils in E – Commerce could be addressed accordingly (Hunter, n .d.).

In a sense, it is considered that the possible risks or perils in the field of E – Commerce is associated in different detrimental form such as, viruses, hackers and abuse of credit card numbers used in the transactions over telecommunication lines (Managing Risks in Electronic Commerce n.d.). However, such risks in E – Commerce could possibly be addressed by means of utilizing technological advances (“Managing Risks in Electronic Commerce n.d.).

Certainly, in E – Commerce, major risks are categorized in three primary areas which are business risks, information risks, and technology risks (Managing Risks in Electronic Commerce n.d.). In a sense, the Information Risks are perils that involve information published and depicted in the web page or sites, which are associated with the manner of e-commerce (Managing Risks in Electronic Commerce n.d.). In addition to this, such category of risk in E – Commerce is considered to be the threats that are associated with the mismanagement of vital information such as violation of laws in a given state and other countries (Managing Risks in Electronic Commerce n.d.). The Technology risk is defined as the hazard that is associated with the databases, telecommunications, software and hardware (Managing Risks in Electronic Commerce n.d.).

Also, these specific risks entails consequences that result to the mismanagement or misuse of technology and the utilization of inappropriate technologies in support of addressing the business needs (Managing Risks in Electronic Commerce n.d.). Business risks, on the other hand, are all about the relationship between the customer or consumers and the supplier. Also, this include risks that are associated with products and services, which are marketed and distributed over the Internet (Managing Risks in Electronic Commerce n.d.). In addition to this, such risk in E – Commerce also involves the possible risks associated with managerial factors in the business, which includes contractual and personnel matters (Managing Risks in Electronic Commerce n.d.).

Furthermore, the risk of Credit Card Fraud is also perceived as one of the detrimental threats or danger in E – Commerce (Electronic Commerce n.d.). It is believed that such business peril has been in the system ever since credit cards are introduced (Electronic Commerce n.d.).

As such, this risk of fraud is anticipated in the business as far as the credits cards are utilized mainly in the E – Commerce transactions (Electronic Commerce n.d.). Likewise, most of the companies involved in the E – Commerce industry is considered to be exposed to such risk by means of credit card utilization and losses for such (Electronic Commerce n.d.). By citing the actual process of utilizing the credit card in E – Commerce, it is clearly evident that such risk of fraud is prevalent in the business (Electronic Commerce n.d.).

However, through the use of simple, but effective, strategies such risks in E –Commerce could possibly be addressed (Electronic Commerce n.d.). For instance, the service-based businesses with returning transactions from recognized client or customers entails a much lower risk of fraud (Electronic Commerce n.d.).

Nonetheless, with the appropriate implementation of strategies and utilization of effectual business system, it is a fact that companies in E – Commerce could mitigate and prevent the possible risks that are stated above and gain positive benefits from online businesses such as credit transactions (Electronic Commerce n.d.).

Arguments, Issues and More

Just like any other business industry, the E – Commerce also experiences different issues that could be harmful in a sense. From a personal point of view, issues and arguments in business sectors is part of its actual practices. Thus, this could also serve as the valuable source of learning, which could be used for improvement and development of the company. In the industry of E – Commerce, it is perceived that the notion of trust is a significant matter that is considered in different issues.

Moreover, “trust” is a notion that everyone clearly understands at a given personal perception (A Thoughtful Approach to Web Site Quality, E – Commerce | Trust & Trustworthiness n.d.). However, it is considered that one of the main issues with regard to trust in E –Commerce is associated with the people’s difficulties in expressing specific definition of such idea (A Thoughtful Approach to Web Site Quality, E – Commerce | Trust & Trustworthiness n.d.). Some of the public entails stricter basis in measuring and evaluating their trust in a person or a company (A Thoughtful Approach to Web Site Quality, E – Commerce | Trust & Trustworthiness n.d.).

Moreover, the strategy to provide or render a reliable state of trust in the field of E – Commerce is considered to be one of the most pervasive issues in the industry that is still in search of possible resolution (Trust Issues in Ecommerce n.d.).

This is due to the fact that such traditional method of face-to-face contact and reputation is far from occuring as compared to that of the actual business transaction of E – Commerce (Trust Issues in Ecommerce n.d.). Thus, the new method that is based on the utilization of digital certificates and cryptographic algorithms rendered by Certification Authorities are one of the common issues in E – Commerce as it is not enough to solve the issues with regards to trust (Trust Issues in Ecommerce n.d.).


With the above facts and information depicted in this essay, it is clearly reasonable to say that trust in E – Commerce plays a profound role in the industry. Hence, such notion is indeed significant in the entire process and actual practice of electronic business. As such, trust in Electronic Commerce works as the essential component towards the achievement of business success. In addition to this, such trust is important in rendering rooms for improvement and development in terms of financial aspects, operational, and over-all business performance.

Thus, such is significant in the industry of Electronic Commerce as it is considered to be the key factor achieving various positive outcomes and results in the business. Nonetheless, the completion of this essay renders definite information on the primary uses and significance of trust in Electronic Commerce practices and business transactions. Moreover, this depicts the major issues of trust in E – Commerce and incorporated with the accorded reasons on such topics together with the appropriate mechanism or methodology to accordingly address such trust issues.


A Thoughtful Approach to Web Site Quality, E – Commerce | Trust & Trustworthiness [online] available from [August 15, 2008].

Building E-commerce Trust Applying Usability Principles [online] available from [August 15, 2008].

eCommerce and the electronics industry [online] available from [August 15, 2008].

E – Commerce Relationships [online] available from [August 15, 2008].

Egger F. (n.d.) Affective Design of E-Commerce User Interfaces:
How to Maximise Perceived Trustworthiness [online] available from [August 15, 2008].

Electronic Commerce [online] available from [August 15, 2008].

Hunter S. (n.d.) E-commerce Risks [online] available from [August 15, 2008].

Managing Risks in Electronic Commerce [online] available from [August 15, 2008].
On-line trust: concepts, evolving themes, a model. (n.d.) [online] available from [August 15, 2008]
Pavlou p. (n.d.). The Transitional Role of Institutional Trust in Online Interorganizational Relationships [online] available from [August 15, 2008]
Singh, S. (1996). The social impact of electronic money. In G. Rosston & D. Waterman (Eds.), Interconnection and the internet (135-154). NJ: Lawrence Erlbaum Associates, Inc.
Sutherland, P. & Tan, F. (2004). The nature of consumer trust in B2C electronic commerce: A multi-dimensional conceptualism. In Information Resource Management Association International Conference, Innovations through information technology: 2004 Information Resources Management Association International Conference, New Orleans, Louisiana, USA, May 23-26, 2004. UK: Idea Group Inc.
The Importance of Trust and Credibility. (n.d.) [online] available from [August 15, 2008]
Trust Issues in E – Commerce. (n.d.) [online] available from [August 15, 2008]

Trust in Electronic Environment. (n.d.) [online] available from [August 15, 2008]

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