Internet Payment Research Based On Industrial Organization Theory

In the current situation, the booming of domestic online market leads to the third-party payment which is on behalf of the non-financial institutions increasingly developed into a professional service subject of principal payment and settlement that offers information exchange, clearing and other services. The article is based on the theory of industrial organization, from the economics point of view to dissect the development of internet payment industry and future trends. This article uses SCP paradigm to analyze market structure, market behavior and market performance of internet payment industry.First of all, on the basis of the main participation in Internet payment, this paper tease out ways to contact and interact among the five participations including consumers, goods, service providers, payment platform, commercial Banks and regulators. This paper analyzes the Internet pay market structure, as well as the factors that affect the Internet pay market concentration, including initial market concentration, market demand, the number of Internet users, market entry barriers, total retail sales of social consumer goods and consumer preference. Among them, the market demand and consumer willingness to pay have a positive impact on the Internet market concentration, while the number of users and market barriers to entry on the market have the negative influence on market concentration. Through empirical analysis, we will find that it is beneficial to guide the enterprise payment strategic transformation, seek new areas, expand the industry, as well as find the breakthrough of profit model.Secondly, in terms of the behavior in Internet payment market, this paper analyzes the Internet business model, pricing, new way of payment, competition, cooperation mode of acquisition and merging and so on. From the perspective of resource optimize configuration, Internet payment market in China under the constraint condition of minimizing the social costs, this paper use improved Salop round-shopping model to compare the Nash equilibrium under perfect competition state and general equilibrium under imperfect competition state. Through analyzed, we will find that the optimal market structure type of Internet payment market in China is the monopoly competition market. This paper also analyzes the performance of Internet payment market in China on the basis of the market structure in China.Finally, based on the findings in this article, author offered some policy advice from the view of market structure, the number of enterprises, business strategy, as well as the supervision of internet payment industry to promote Chinese internet payment market turns to an orderly composited and healthy developed market.