Ict, e-business and Small and Medium Enterprises

Building security and trust  

Lesser known SMEs are at a clear disadvantage in terms of buyer confidence compared with 

large multinationals with highly recognisable brand names.  On-line clients view recognition of a brand or 

company name as an indicator of a firm’s credibility just as they do off line. Inability to verify the on-line 

seller’s credentials ranks high among reasons for reluctance to buy on line (OECD, 2002d).  

A professional Web site can help to improve a firm’s image for large-scale B2B transactions. A 

study of 12 Canadian high-technology SMEs, most with fewer than 90 employees, showed that these firms 

considered a Web site as a means to improve credibility, but the major target audience was potential clients 

and investors, not individual customers. Some placed detailed corporate information on the site to illustrate 

their technology and financial base (Tiessen et al., 2001). For contracts involving large transactions, as in 

B2B commerce, a firm needs to be confident about its client’s credibility, and a simple Web site is unlikely 

to convince new buyers and suppliers to begin to conduct business with most SMEs.  

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Moreover, consumers who use credit cards for on-line transactions are highly concerned about 

security, protection of credit-related information and secure system firewalls. As more on-line clients 

demand secure transaction environments, SMEs are likely to face increasing costs for system protection 

and security measures (Phillips, 2002). Statistical surveys show that security issues (viruses, hackers) are 

among the most important perceived barriers to Internet use by businesses (B2B and B2C), although large 

firms perceived these barriers as more important than small ones presumably because they were more 

likely to be transacting and have a larger share of transactions over the Internet (OECD, 2002c). Barriers to 

Internet commerce for businesses included payment uncertainties and contract, delivery and guarantee 

uncertainties, with very wide variations in perceived barriers across countries, and unsuitability the major 

barrier. Payment uncertainties were relatively important in Italy, Spain, Austria, the United Kingdom, and 

Portugal, and affecting smaller firms more in Spain, the United Kingdom and Finland (Figure 14).