Risky crypto: The effect of cryptocurrency as payment method on trust in consumer-firm relationships
Type
conference contribution
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 shape consumer-firm interactions. Through one large-scale pilot study, four experiments, and one large-scale field experiment, we demonstrate that consumers perceive cryptocurrencies as a riskier payment method compared to traditional payment methods. We introduce a risk-transfer-model of payment technologies and show how this heightened risk perception induced by a payment option subsequently increases consumers’ perceived interaction risk to engage with the same firm. These risk dynamics negatively impact and ultimately erode consumers’ evaluation of the firm offering the payment method. We further 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 baseline trust with consumers, 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 of digital currencies when used as a means to pay for products and services. This research provides novel insights into how digital currencies and innovative payment technologies shape the psychology of consumer-firm relationships and what firms can do to effectively manage consumer expectations and risk.
Event Title
Swiss Academy of Marketing Science Conference
Event Location
Lucerne