Does Nepal’s E-commerce Act 2025 Build Trust or Burden Digital Business? A Logistic Regression Analysis of Consumer Trust

Abstract

Consumer trust continues to pose a critical constraint in the development of e-commerce, especially in developing countries, whereby the consumers cannot physically see the product and seller before making a purchase. This study examines if Nepal’s E- commerce Act 2025 strengthen consumer trust or create burden on digital businesses. It further investigates how Institutional Assurance, Regulatory Clarity, Compliance Visibility, Perceived Risk, and Vendor Trustworthiness shape consumer trust in Nepal’s e-commerce environment. A quantitative research design has been employed in the study, and the data were collected from online consumers in Nepal through a structured survey. The data analysis incorporated logistic regression to assess the infl uence of the factors in the formation of Consumer Trust in the context of the new e-commerce Act. The fi ndings of the study reveal that consumer trust is infl uenced through visible compliance, lower perceived risk, and trustworthy vendor rather than regulation alone. The formal legal assurance and regulatory clarity were less infl uential in directly building trust. Nepal’s E-commerce Act 2025 can be helpful in building consumer trust, but only when the rules and regulations are refl ected in real marketplace practice. The formation of trust is based through safe transactions, transparent processes, and vendor behaviour further implying that the practical enforcement matters more than the presence of law alone. This implies that policymakers should complement the Act with eff ective enforcement, seller verifi cation, visible compliance disclosures, secure payment arrangements and accessible grievance mechanisms so that legal protection becomes observable in consumers’ everyday transactions.