Drivers of Cash-on-Delivery Method of Payment in E-Commerce Shopping: Evidence From Pakistan

Abstract

The e-commerce market of Pakistan has phenomenally fostered in recent years as a result of cyberspace expansion and launching of various national and international vendors. While country’s e-commerce scenario has significantly reshaped, customers are still reluctant to adopt e-payment methods and cash on delivery (COD) prevails as the method of payments for online shopping. This study was conducted to empirically investigate major factors which influence Pakistani customers to opt for COD while shopping online. A framework was proposed based on seven constructs and the data were collected using 5-point Likert-type scale. Statistical Package for the Social Sciences (SPSS) v. 22 and Amos v. 23 were used for statistical analysis and structural equation modeling (SEM). Cronbach’s alpha values above .85 were found suggesting good internal consistency. The goodness-of-fit index and adjusted goodness-of-fit index values were observed to be 0.933 and 0.866, respectively. In SEM analysis, perceived security against online scams and perceived control over the buying process were observed to be the key role players instigating Pakistani customers to use COD. Interestingly, perceived trust and perceived satisfaction did not show significant impact. Moreover, the moderator of ease of use positively mediated the influence of perceived security on the use of COD. This study presents imperative implications for online businesses as well as government agencies. The investigation provides an insight into purchase behaviors of Pakistani e-customers and has paramount importance for e-commerce retailers and marketing startups in evolving e-commerce scenario of the country.