HOW DO CUSTOMERS PAY FOR THEIR ONLINE FOOD PURCHASES? A Study on the Online Food Purchasers in Bangladesh

Abstract

This paper investigates the choice of payment methods by online food purchasers in Bangladesh. The objective is to identify the factors influencing the choice of payment methods and factors influencing the choice.  Responses are collected from 540 respondents through an online questionnaire survey. Cross-tabulation, frequency analysis, the Chi-square independence test, and binary logistic regression are used for in-depth analysis of the data. Cash on delivery is found to be the most favored method of payment followed by mobile financial services (MFS) and internet banking and/or debit/credit cards. Among the demographic variables, purchasers’ gender showed a significant but weak influence on the choice of payment method. MFSs are the most preferred payment method for men. A larger percentage of women prefer the cash-on-delivery method. The use of debit/credit cards is more prevalent among the female purchasers. Other demographic variables such as household income, age, and profession did not portray any significant influence on the choice of payment method. However, frequent buyers are found to prefer online payment (MFS, card, or internet banking) to occasional buyers. The findings of the study contribute to business literature by shedding light on an inadequately tapped area of research. Factors identified to be significant in the choice of payment methods will help online food traders address issues related to their business process and effectively communicate the improvements they can make. The findings of the study may also instigate the financial service providers to be motivated to focus on educating customers about online payment systems and their built-in security.