The Empirical And Theory Analysis For The Strategy Of China’s Payment Card Fees To Consumers

Payment card is issued by the commercial banks, which has consumption, transfers, withdrawals and other functions. Nowadays, credit and debit cards have become an important part of our payment system, which contains consumers and merchants. Chinese payment system has gone through three distinct stages of development. In 1985, Zhuhai’s BOC has issued the first generation of payment card. Payment card system can’t communicate with each other at that time, so we can just use it on their own machine. Secondly, started from 1993 to 2002, that is the second stage of the development of China’s payment card. But nationwide communications still can not be used. "Golden Card Project" is the representative project at this stage. Since from 2002, with the establishment China UnionPay, China’s payment system has developed quickly, which promotes networking in China. Now in the Internet era, research on consumer strategy of China’s payment card is a very important problem.Compared to the previous study, this paper has two new ideas. Firstly, in empirical model, it uses GMM analysis model. Our data comes from China’s number of pieces of payment cards issued from 2002 to 2013 and China’s number of merchants from 2002 to 2013. And then, we find our country’s payment card market accords the characteristics of two-sided markets, that makes us establish our theory model. Secondly, we establish a game theory model of China’s payment card market. The innovation is that we consider our banks are public banks and private banks, and consumers, merchants, public banks and private banks all are included in the model. And we solve for a subgame-perfect equilibrium of the following two-stage game which public banks enter markets at first. After that, we wish to study the regular behind the public and private banks.On the basis of the above research, we draw the following conclusions:1, payment card industry is an important part of bank retail business and intermediary business; 2, China’s bank card markets have cross-network externality, according with the characteristics of two-sided markets; 3, theoretical analysis shows that the public bank’s payment card’s price will be higher than that of private bank. The price relates to the interchange fee; 4, for consumers, the level of interchange fees and the merchant fee are negative to the bank’s payment card’s price; 5, strength of public banks is related to the switching cost positively, and the switching cost is negative to the strength of private banks.