Do security breaches matter to consumers

Online security has been an important topic in electronic business. However, even the best IT security infrastructures cannot assure that cyber-attacks and malicious intrusions can be prevented. Therefore, it is important to know what is to be done when a security breach occurs, and how it influences consumers’ perceptions and behaviors. Via a survey of 258 respondents, this paper makes a first attempt to identify the relationships among security breach announcements, consumers’ perceived risks (including performance risk, financial risk, time risk and privacy risk), company reputation and a consumer’s intention to transact. Our key findings and implications are discussed.