Market Power And Regulation In Third-party Payment Market Of China

In recent years,with the development of Internet technology and mobile information technology,the traditional business activities have changed from offline to online,which directly stimulates the development of third-party payment platform.The total payment via third-party payment platform in 2015 reached 31 trillion and 200 billion Yuan(including third-party Internet payment,mobile payment,prepaid card,offline acquire business)with an increase of 33.91%on year-on-year basis.As the typical bilateral market,the third-party payment can be applied to the payment in e-commerce website which should be based on completion of the e-commerce transactions.Therefore,the third-party payment platform has become the bridge between electronic business websites and e-commerce users.However,there are some inevitable problems during the exponential expansion of the industry in the past ten years,such as precipitation funds,customer information security,the lack of government supervision and price discrimination.In recent years,Alipay nearly accounts for half of the market share.Alipay,Tenpay and UnionPay totally gain 80%of the market share.According to the article 19 of Anti Monopoly Law of the People's Republic of China,independent business operator occupies half of the market share in relevant market or total market share of three operators are three-quarters in relevant market,it can be concluded that the operator plays a dominant role in the market.Therefore,there is a strong monopoly competition in third-party payment industry.Facing the tendency of monopoly,it is of practical significance to study the sources of market power in the third party payment industry,measure the market power by various methods,analyze the influence of market forces,study regulations ruled by the government,measure the efficiency of industrial regulation.It elaborates the development background and research significance of the third-party payment industry;then an overview of literature at home and abroad are given.In the next,theoretical research is conducted in third-party payment industry,market power and industry regulation.Actual data then are applied to measure the market power in third-party payment industry and regulation efficiency in third-party payment market.Super efficient DEA model is uesd to measure the efficiency of regulation.Finally,according to supervision measures by China,America and European Union,regulatory suggestions and opinions are put forward for future development.The conclusions of the study are as follows:1.The third-party payment market is a market full of bilateral monopolistic competition in tilting pricing model.Cross subsidies and predatory competition are no strangers.2.By measuring and calculating the concentration ratio(CRn,HHI,EI)and the price level(Lerner Index)in the present text,we found that the third party payment processes a huge market power,which relies on four aspects:effect of scale economy,high barriers to entry,differentiation of products and high customer loyalty.3.Given that the negative effects which market power of third-party payment will bring to our society,for instance,reducing efficiency of resource allocation,increasing the improper price competition,bringing irregular operations,etc.,Chinese government has been imposing industry regulations on six aspects since 2010.There are business license management,operation and exit management,management of consumers'rights and interests,management of provisions,management of money laundering prevention and price management.4.The results of efficiency of regulations,evaluating with the help of super efficient DEA model,show that the regulation efficiency in China is unstable with prominent characteristic of“trial and error" in periodic regulation.Therefore,the government should impose cautious and prudent regulations in the exploratory stage.At the same time,there are still many problems on the following aspects:low law hierarchy,unclear distribution of separated supervision,lack of practical protection of users' rights and interests,two-sides of high barriers to entry,ignorance of price regulation,etc.5.The text concludes and puts forward the following policy-making suggestions in reference to the regulatory experience of the United States and the European countries in the conclusion part:China should upgrade the legal hierarchy of policies of third-party payment,strengthen the management of market entry exit,improve the credit rating system,strengthen efforts of information disclosure,reinforce provisions management,intensify penalties and regularize the pricing behaviors.