Pay online or pay on delivery? An ERP study of how payment methods affect online purchase decisions for search vs. experience products

The payment method is a key factor influencing online consumers’ purchase decisions. However, little is known about its underlying neural basis, which could help to reveal the mechanism by which payment methods affect online purchase decisions. Combined with the event-related potentials (ERPs), a neuroscience technique with the advantage of measuring implicit psychological variables to reveal the mechanism behind behaviors, this study uncovers consumers’ discrepant perception between pay-online and pay-on-delivery in different purchase contexts through an online purchase task. Behavioral results showed that purchase intention is higher for pay-online than pay-on-delivery, regardless of product type. At the brain level, we found consumers induce higher perceived risk (indicated in larger N2 amplitudes) and smaller negative emotion (mirrored by larger P3 amplitudes) for pay-online than pay-on-delivery, especially when shopping for search products. However, this effect disappeared when purchasing experience products. Moreover, the larger perceived risk for experience products than search products may lead consumers to ignore the difference between the two payment methods. This study helps online sellers optimize payment services for specific products.