Many customers who use online banking facilities are reluctant to change banks because of the effort it would take to change automatic and online payment settings. The process involved is cumbersome and requires time and effort to cancel old accounts and set up new ones. The costs associated with such liabilities that explain the customers' reluctance to change banks are referred to as _____.
A) overhead costs
B) variable costs
C) switching costs
D) fixed costs

Question

Quizplus · Accepted Answer

Switching costs refer to the costs associated with changing from one product or service provider to another. In this case, the customers are reluctant to change banks because of the costs associated with changing automatic and online payment settings. These costs are known as switching costs.

Many Customers Who Use Online Banking Facilities Are Reluctant to Change