Risky crypto: The effect of cryptocurrency as payment method on trust in consumer-firm relationships
Type
conference poster
Date Issued
2023
Author(s)
Abstract
The rise of cryptocurrencies is transforming how consumers trade, purchase, and pay for products. The current work explores how cryptocurrencies used as a payment method offered by a firm shape consumer-firm interactions. Through one large-scale pilot study and four experiments, we demonstrate that consumers perceive cryptocurrencies as a payment method riskier compared to traditional payment methods. We introduce a risk-transfer-model of payment method technologies and show how this heightened risk perception induced by the payment method subsequently increases consumers’ perceived interaction risk to engage with the same firm in the future. These risk dynamics negatively impact and ultimately erode consumers’ evaluation of the firm offering the payment method. However, we demonstrate two important boundary conditions: When firms actively communicate the privacy benefits of cryptocurrencies as a payment method or when the firm has a higher trust premium, the negative effects of cryptocurrencies as a payment method are reduced. Our findings highlight the unintended risks of crypto payments and the importance of effectively managing consumer risk perceptions due to new payment technologies. This research provides novel insights into how payment technologies shape the psychology of consumer-firm relationships and what firms can do to effectively manage consumer expectations and risk.
HSG Classification
contribution to scientific community
Refereed
Yes
Event Title
Association for Consumer Research Conference
Event Location
Seattle, Washington, USA
Event Date
2023
Contact Email Address
philipp.winder@unisg.ch