The mediating role of consumer trust in an online merchant in predicting purchase intention

• Performance, psychological, social and online payment risks were found to negatively affect purchase intention.
• Perceived risk can be an important antecedent, as well as a consequence, of consumer trust.
• Trust completely mediates the effect of performance risk, but partially mediates that of the psychological risk.
• Reduction of risks will first improve consumer trust, and then increase consumer's intention to buy online.

It is widely known in related literature that trust in a merchant reduces the perceived risk of an online transaction. However, there are theoretical reasons to postulate that the perceived risk acts as a barrier to consumer trust. Furthermore, existing studies suggest that trust is an important predictor of purchase intention. Thus, this research aims at investigating the mediating role of consumer trust in an online merchant in the relationships between components of perceived risk and purchase intention: (1) examining the total effect without mediation, and (2) examining the mediation effect. When we probed the total effect, the findings revealed that performance, psychological, financial, and online payment risks have a significant negative influence on purchase intention. On the other hand, an examination of the mediation effect indicated that trust in an online merchant completely mediates the effect of performance risk, but partially mediates that of the psychological risk. Given the mixture of unmediated as well as mediated effect of perceived risks on purchase intention, the paper concludes that efforts, made by online merchants, to lessen certain types of risk will first improve consumer trust, and then ultimately, increase consumer's intention to buy online.