Of all the factors restricting their engagement and participation in e-commerce, security is the main concern for customers and businesses alike. Existing research has dealt with the issue of e-commerce security by focusing separately on the customer or on the business, but there is little research attempting to investigate both as a single phenomenon. This research considers the two perspectives jointly in order to establish a comprehensive viewpoint, and to reduce the gap between the solutions and security being implemented by organisations, on the one hand, and the perceptions of customers, on the other hand, thus allowing a more in-depth understanding of the customer's needs and priorities to be taken into account by organisations. This research is undertaken in Jordan, an environment where no other research into security perception in e-commerce has taken place. The reason for choosing the Jordanian context is justifiable as most existing research conducted in Jordan confirms the security concern in e-commerce and Internet banking, without exploring the issue in depth. This barrier (i. e. security) makes both Jordanian organisations and individual customers hesitant to participate in e-commerce transactions, and thus reduces the growth of e-commerce. An interpretive case study method has been adopted and guides the grounded theory analysis method of research into the perceptions of customers and of businesses and IT personnel. This research, which is qualitative and subjective in nature, involves examining and identifying the meanings of the participants in order to gain an understanding of the phenomenon under study. Qualitative research enables the researcher to understand the phenomenon in depth without being limited to certain predetermined hypothesis and factors that are defined from literature, so that issues are allowed to emerge from the natural setting of the context (i. e. Jordan). Grounded theory procedures and techniques have been used to explore the relevant influence of factors on the effectiveness of e-commerce security and to identify the relationships between them. The empirical findings show seven factors: cooperative responsibility, implementation concerns, commitment of management, users' characteristics, social communication, psychological aspect of security, and tangible and intangible features of security. Finally, a critical discussion of research implications has been drawn which extends the theoretical base of e-commerce security within the IS domain and provides broad insight for decision-makers and practitioners in Jordan.