Enabling trust online : the E-commerce shari`ah compliant model

Abstract

There is a growing global concern among e-commerce customers particularly among Muslim customers regarding online transaction both from the technological and Shari’ah perspectives, which require researchers to examine its application into these dimensions. Through this study, the researcher aimed to (i) identify the issues that concern Muslim customers in the conduct of online transactions; (ii) examine factors that influence Muslim user’s behaviour in e-commerce transaction; and (iii) investigate trust and trustworthiness influences on Muslim intention to purchase online. In order to pursue these objectives, the researcher utilized both qualitative and quantitative method. Analyses and results suggest that, there were four major issues that all respondents had in common that concern Muslim customers in the conduct of online transaction, such as (i) Shari’ah compliance, which means that the internet seller must provide assurance that they follow acceptable Islamic transaction; (ii) Assurance, which means that if something goes wrong with the online transaction, the internet seller must ensure to the buyers that they could pursue their legal rights as customers; (iii) Risk or the uncertainty that the item purchased will not be sent after the money has been paid; and (iv) Trustworthiness of internet seller, which means that web seller should not cheat and must always be honest in dealing with customers. These four concerns encapsulates the core of all the issues mentioned by the 24 participants who complied to the one-to-one structured interview conducted by the researcher. Furthermore, there are different factors influence the Muslim customers’ behaviour in their e-commerce transaction. Such factors include: (i) perceived integrity; (ii) perceived competence; (iii) perceived benevolence; (iv) trust in e-commerce transaction; (v) trust propensity; (vi) Shari’ah compliance; (vii) perceived ease of use; (viii) perceived usefulness; (ix) perceived risk; and (x) intention to purchase online. Trust and trustworthiness of consumers towards e-commerce transaction ultimately influence their intention to purchase online. There is a strong evidence for the mediating effect of trust in an e-commerce transaction in the relationship between competence, perceived ease of use, shari’ah compliant and intention to purchase online. The mediating effect of trust is strong in shari’ah compliant. The form of Shari’ah compliance model in e-commerce symbolizes the same connotation as of the conventional, but all transactions must be in line with the Islamic law and are free from (i) interest (riba), (ii) gambling (maisir), (iii) uncertainty (gharar), (iv) coercion (ikrah) and (v) forbidden (haram) elements. E-commerce involves trading between buyers and sellers, it needs to fulfill essential requirements and conditions of Islamic law of contract, namely (i) offer and acceptance (form), (ii) buyer and seller (contracting parties) and (iii) object and price (subject matter), therefore deems valid. The identifed factors are essential ingredients for the success of e-commerce especially to the internet seller. The developed model explains the barriers and the important variables which need to be concerned when implementing an e-commerce system. A new theoretical model has been generated by this research to measure the enabling factors as mentioned earlier for behavioural intention of Muslim in an online transaction.