THE IMPACTS OF BLOCKCHAIN TECHNOLOGY ON CONSUMER TRUST IN E-COMMERCE: A SYSTEMATIC ANALYSIS

Abstract

The popularization of e-commerce in Indonesia has transformed the way the consumers act, yet it has raised the concerns about the security of the data, transparency of transactions, and consumer-trust. Trust remains a major bottleneck in Indonesia’s digital economy mainly related to privacy, fraud and uneven seller responsibility. Blockchain is highly scalable and with its implementation of technology properties that include decentralization, transparency, and immutable has a lot to offer. The current study is about investigating the effects that blockchain technology would have on customer confidence relating to e-business in the country of Indonesia. This research follows mixed-method approach to studying the topic (literature survey and the survey of 250 online consumers in Indonesia). The research findings indicate that the factors of trust that are being facilitated by blockchain like smart contracts, traceability, and secure digital identity can increase customer trust, especially in the areas of the privacy protection, secure payments, and transaction fairness. The Structural Equation Modeling (SEM) testifies to the fact that the correlation between the blockchain-based trust and the consumer behavioral outcome including satisfaction and continued platform use can be estimated as strong. The theoretical contribution of the research is that it extends the theories of trust in online retailing, and its practical use is applicable in Indonesian online retailing and programmer and policy-maker by offering a number of methods that could promote the credibility of the platform and interest consumers.