The Study On How Third-party Online Payment Influences Commercial Banks’ Profit

The development of information technology promotes the prosperity of network economy and change the traditional way of cash payment into electronic payment. Because of the development of e-commerce and ignorance of commercial banks, Chinese third-party online payment platforms grow rapidly. In recent years, the development of third-party online payment platforms has shown powerful influence. While it has affected the related business of commercial banks, it also promotes the innovation and transformation of commercial banks.Scholars have study the co-opetition relationship between the third-party online payment platforms and commercial banks. On the basis of previous studies, this paper analyzes how third-party online payment platforms affect the commercial banks’ profit. In the beginning, this paper analyzes the cooperation and competition relations between third-party online payment platforms and commercial banks. Then, analyzes how different business of platforms affects the related business of commercial banks and uses sensitivity analysis method to quantize this influence. We have following results. On the one hand, the third-party online payment platforms and commercial banks remain the cooperation relations. The development of the third-party online payment can increases the commercial banks profit and customers in a certain extent. On the other hand, the development of the third-party online payment also brings challenges to commercial banks. First, on the intermediary business, the payment and settlement function and channel sales function of platforms affect the bank card business and agent revenue of commercial banks. The fees and commissions of commercial banks show sensitivity to the alternative impact of third-party payment platforms, while the operating income has less sensitive response. Second, on liabilities business, the third-party payment platforms scattered bank deposit and raised the cost of banks’ liabilities. Client precipitated money and money market fund are two reasons for the influence. With the increasing of deposit conversion ratio, bank liabilities cost increased and spreads dropped. Third, on asset business, on the basis of accounts, third-party online payment platforms can develop personal installment business and peer to peer lending business which may influence credit card business and retail banking of commercial banks in the future.Overall, the scale of third-party payment platforms is much smaller than commercial banks at present, so it won’t cause significant impact to commercial banks in a short time. However, the development of third-party online payment platforms weakened the financial intermediary function of commercial banks in a certain extent. Online payment is a typical bilateral market which has cross network externalities. The scale of the platforms and customer stickiness has great significance to the development of platforms. The development of large payment platforms may have great competition to the commercial banks’ business in the future. On the basis of the effects of the third-party online payment platforms, this paper promotes four suggestions for commercial banks.