Co-operation Model In Domestic Mobile Payment Industry

This article focuses on the co-operation model of mobile payment industry and analyzes the potentially relevant influencing factors. As there are lots of uncertainty of technology trend and business model,any will lead to the change of co-opertion model,the research is based on the assumption that the mobile operater faces high cost for market entry and the business model of the mobile payment is the same as the bankcard payment.The structure of the article includes seven chapters. Chapter 1 simply gives the reasons why we pay attention to mobile payment co-operation model.Chapter 2 points out the experiences of overseas mobile payment industry. On the basis of the study about the structure of this industry chain and the functions and positions of key links, we find out that there are two two-sided platforms in the mobile payment industry, that is, the payment swith platform and the payment application platform which are focus of the mobile payment industry. Then we conclude and contrast three current co-operation models: the mobile operator as the dominant player, the bankcard association as the dominant player and the third-party payment service provider as the dominant player.Chapter 3 researches the economic properties of the mobile payment industry, including the system complexity, the two-sided market and the value network formation. The system complexity leads to the industry complicacy. The property of the two-sided market makes it possible the creation of business model and will causes the revolution of the payment industry. The transition from the value chain to the value network challenges the traditional industry leader.Chapter 4 and chapter 5 build the quantity models about the market equilibrium of the payment swith platform and the ownership design of the payment application platform. Chapter 4 finds out the gaming between the mobile operator and the bankcard association varies with the industry environment from a long-term point of view. Two sides choose competition or collaboration depending on the initial situation of the whole system. If the business model of the mobile payment fixes with the bankcard industry and the mobile operator independently runs the swith platform with high cost, the co-operation between the mobile operator and the bankcard association will become the main way.Chapter 5 shows the main mobile payment service providers should work together including mobile operators, banks and industry-card operators, if we only count the prime fix cost about the platform build. Only if the third-party market owns the perfect competition structure, the platform owner just outsources the managerial authority. Although the platform cost involves variable cost in reality, we only draw the rough conclusion for the complex result. Under the separation from propriety to managerial authority, the market equilibrium depends on the proportion of share in profits which possibly changes the social welfare.Chapter 6 proposes the domestic co-operation model. After the comparison of the SWOT and developing strategy among main players, combining with the first two chapters' research, we indicate that the most suitable co-operation model is to buildthe shares of strategic alliance among main mobile operators and banks------establishthe joint venture which runs the mobile application platform. At the same time, they should build the contractual strategic alliance with the third-party payment service providers involving Chinaunionpay who can provide payment swith service.The characteristics are that mobile operators and banks focus on their respective key products, come to the close agreement on the information safety, the product development and the resource share, then control the whole industry chain together. Under this framework, Chinaunionpay still keeps its payment swith position but faces more violent competition. The number of competitors increasing is helpful to activate the vigour of enterprises, to enhance the industry efficiency and the competitive power.The last chapter draws the conclusion of main findings in this article, and brings forward some aspects which need to study more deeply.