The Optimal Pricing Strategy of a Mobile Payment Service in a Two-sided Market

Acknowledging the high penetration rate of mobile devices, mobile payment is currently a hot topic and is expected to reach the tipping point of rapid growth. For such a nascent market, how to run a successful mobile payment platform remains unanswered. Therefore, we devote this study to investigate the pricing strategy of proximity mobile payment. Mobile payment serves as a two-sided platform connecting merchants and customers. By leveraging the emergent mobile payment knowledge, we present a game-theoretic model featuring network externality. In the short run, we find the platform will have incentives to apply “divide and conquer” strategy by subsidizing customers to adopt the mobile payment service at the beginning of the business. After the ignition, the platform then becomes profitable by charging per transaction fee from the merchants. In the long run, the subsidization strategy is suggested to be applied when the bank is not taking too much processing fee and leaves sufficient market share to the mobile payment platform. In terms of contributions to practice, this study offers a step forward of method to identify this promising market for mobile payment executives, financial institutes and all others ecosystem

AN ANALYSIS ON THE MOBILE PAYMENT INDUSTRY IN CHINA AND ITS IMPLICATIONS TO MALAYSIA

Internet which is one of the most transformative and fast-growing technologies has become an integral part of our lives. Globally, the number of Internet users increased from only 413 million in 2000 to over 4.5 billion as of June 2019, with the Internet users from Asia Pacific made up the major market share. Owing to changing lifestyle and rapid growth in E-commerce, this trend is expected to continue over for subsequent many years especially in China. China’s mobile payment transaction volume has reached 190.5 trillion Yuan in 2018, with a year-on-year growth rate of 58.4% due to its advantages of security, stability and convenience. Meanwhile, Malaysia which represents one the fastest growing mobile payment market in the world, has its mobile payment usage skyrocketed in the last five years reaching a staggering 40 billion ringgit. Since 2005, the year when Central Bank of Malaysia liberalized its policy by permitting non-banking institution to provide mobile payment service, there were only 1billion ringgit spent via 365.6 million transactions. 13 years later, the transaction volume has increased to 11 billion ringgit with 1.92 billion transactions made. This implies that there is a huge development opportunity of mobile payment industry in Malaysia and the biggest mobile payment industry in the world, China can be a development model for further growth of this industry in Malaysia.  Besides analyzing the current development of the mobile payment industry in China at the beginning of this paper by carrying out life cycle analysis, this paper also studies the influencing factors and challenges of mobile payment in China. Moreover, a comparison of the industry in both China and Malaysia has been drawn out by using PEST analysis. Lastly, the author also proposed the measures and suggestions for enhancement of mobile payment industry in Malaysia

Alipay entered Malaysia:A closer look at the new market entry strategy driven by Chinese tourists

Purpose: This study aims to investigate the entrance of Chinese-based Alipay’s mobile-payment (m-payment) technology into Malaysia. Malaysia allowed this entry of the first foreign m-payment company because it would allow Chinese tourists spending while they are visiting Malaysia. It will view this entrance from a Malaysian perspective. Design/methodology/approach: The views of Malaysian players (Bank Negara Malaysia officers, three Malaysian banks’ officers, Alipay-Malaysia officers, airport section manager, convenience store manager and airport store sales executive) were sought via qualitative interview concerning Alipay’s entry into the Malaysian market. Respondents who had relevant knowledge and/or were involved in Alipay m-payment technology development in Malaysia were contacted, while there remainder were obtained by snowballing. Secondary data was collected from Bank Negara Malaysia’s policy, three Malaysian banks’ reports, the Alipay-Malaysia public statements and the Airport and Convenience Store reports. Triangulation using primary and secondary data was used to safeguard the validity and reliability of the outcomes. Findings: The entry strategy used by Alipay was different from those reported in previous studies. The establishment of Alipay-Malaysia was the first element of the “mode of entry” gaining pioneer status in Malaysia. The next stage was gaining support from Bank Negara Malaysia-Malaysian Central Bank and three Malaysian banks (Maybank, Public Bank and CIMB) through collaborative ventures with Alipay-Malaysia Sdn. Bhd., leading to acceptance nationwide by local merchants. The key driver of acceptance being Chinese outbound tourists in Malaysia. Research limitations/implications: This case study was conducted during the early implementation of Alipay in Malaysia from 2015 until April 2019. During this period, there were challenges due to the lack of primary data. These were overcome by the support from the respondents and the secondary data. Practical implications: This study contributes to insights from a different entry strategy that used tourism as a leading force. This can give guidance to other m-payment service providers or other countries as m-payment technology recipient about “market entry strategy” and “modes of entry” following Alipay’s approach. Originality/value: To date, no study has been conducted to investigate the nature of Alipay m-payment in Malaysia. This qualitative study has examined the new phenomenon regarding how Alipay entered the Malaysian market. Moreover, this study can also contribute new insights into the existing theory of “market entry strategy” in terms of Alipay’s tourist-based approach

M-Payment - How Disruptive Technologies Could Change The Payment Ecosystem

Within developed economies, the field of m-payment appears to be driven by (disruptive) technological innovations. M-payments, similar to e-payments, have been regulated in such a way that banks and other established financial institutions have been able to maintain an unchallenged position in the payment ecosystem. However, disruptive technologies like Near Field Communication, but more im-portantly cloud technology based solutions might lead to dramatic changes. In the long run this may change the position of banks in the payment ecosystem including their control over “money flows”. Yet, for this to happen m-payment solution and service providers need to understand the role of money and payment instruments as well as how payment ecosystems work, in-depth. In this conceptual paper we discuss how the ecosystem of m-payment is expected to change due to technology changes. Based on platform and ecosystems concepts, theories of money and behavioral theories a comprehensive lit-erature review and a qualitative meta-analyses of the m-payment literature is presented. On the basis of the theory review and literature analysis we expect that the role of Over The Top (OTT) providers in the m-payment ecosystems will be driven by cloud-based solutions and threaten the position of tra-ditional players. Banks need regulators to safeguard their control over the money flow

On the innovation mechanisms of fintech start-ups: insights from Swift's innotribe competition

The emergence of nascent forms of financial technology around the globe is driven by efforts to deconstruct and reimagine business models historically embedded within financial services. Entrepreneurial endeavors to this end are diverse. Indeed, the propensity towards complexity across the fintech landscape is considerable. Bridging as it does a diverse range of financial ser-vices, markets, innovations, industry participants, infrastructures and technologies. This study aims to improve the comprehension of the global fintech landscape. It is based on the analysis of start-ups who participated in SWIFT’s Innotribe competition over a three-year period. We used cluster analysis to group 402 fintech start-up firms, and then selected representative cases to create a foundational understanding of the structure of the fintech landscape. We found that six clusters capture the variety of firms and their activities. The main findings of this work are: (1) the development of fintech clusters to classify core services, business infrastructures and underlying component technologies, which characterize the fintech landscape; (2) an analysis of how fintechs synthesize different technologies to restructure and coordinate flows of financial information through competitive and cooperative mechanisms of disintermediation, extension of access, financialization, hybridization and personalization; (3) an analysis of related strate-gies for value creation connected with the competitive and cooperative mechanisms that were identified. Collectively, our results offer new insights into the diversity and range of emergent innovations and technologies which are transforming the financial services industry worldwide

Smart parking : o caso Volkswagen financial services

Mestrado em Gestão e Estratégia IndustrialEste trabalho tem como objetivo analisar os passos necessários para a implementação de um negócio smart parking em diferentes mercados e com diferentes níveis de maturidade. Serão analisados os diferentes modelos de negócio, municipal, intermediário e de revendedor e as situações em que se aplicam, bem como as diferentes estratégias de entrada em novos mercados, e que possibilidades existem para implementar o produto smart parking em diferentes mercados. De seguida, com recurso a dados recolhidos através de uma análise de mercado, analisar-se-ão dois mercados, Portugal e Alemanha, com características diferentes, e que requisitos existem para uma aplicação smart parking ter sucesso, na sua entrada e evolução. Por fim abordar-se-á a possível evolução do negócio smart-parking face à evolução tecnológica que ocorre no ramo automóvel.This work aims to analyse the steps necessary for the implementation of a smart parking business in different markets, with different levels of maturity. It will analyse the different business models, municipal, intermediate and reseller and the situations in which they apply, as well as the different strategies of entry into new markets, and what possibilities exist to implement the smart parking product in different markets. Then, using data collected through market analysis, two markets, Portugal and Germany, with different characteristics, will be analysed to determine what requirements exist for a smart parking application to be successful in its entry and evolution. Finally, the possible evolution of the smart-parking business in the face of technological developments in the automotive industry will be addressed.info:eu-repo/semantics/publishedVersio

Mobile payment as a multi-sided platform : Success factors and IT governance practices

The aim of this research was to discover factors that lead to mobile payment platform’s success in the Finnish market. Mobile payment research has been ongoing for the past 20 years but no solution has made a clear breakthrough. Research has focused on technological factors, factors concerning consumers and adoption of mobile payment solutions and the majority has been exploratory, early research. Because of the rise of mobile technology and popularity of mobile content, flexible use of mobile phones and growing amount of non-cash transactions is a turning point now possible for mobile payment solutions. Along the success factors this research aimed to consider governance practices and to examine the perceived roles of the ecosystem participants. This is a qualitative study based on a case, MobilePay, a mobile payment platform provided by Danske Bank. Eleven semi-structured interviews (conducted in January 2017) with mobile payment ecosystem participants, industry experts, served as the research data, along with literature and publicly available information. The importance of nine success factors (choice of technology, choice of features, size of the ecosystem and openness, security, service pricing, reliable platform provider, guidance, training and support, successful implementation of service changes and sales and marketing of the platform) was evaluated. Because IT governance has been considered successful in the field of IT, two structures, three processes and three relational mechanisms were chosen to be evaluated to see their suitability in a mobile payment ecosystem. To create a better picture of the ecosystem, the perceived roles and responsibilities of the ecosystem participants were examined. All nine success factors were considered greatly significant for the success of a mobile payment platform. The successful implementation of service changes, the choice of technology and marketing of the platform were seen as the most important factors. User support was perceived the least important. Four success factors, user experience, ease of implementation, ability to use in all channels and loose competition and authoritative control, were added by the interviewees. Both cooperation between the ecosystem participants and clearly defined roles and responsibilities were perceived as critical for success. Solutions should also be based on existing standards. Identified contact persons in the participants’ organizations and a defined development plan were considered well-suitable for governing the mobile payment ecosystem