Prcing Strategy Of The Third-party Payment Platform On Two-sided Market Theory

With continuous permeating of the Internet through our social life,the economic activities of residents and enterprises are expanding to the online area.As the connections among the third-party payment service providers,financial organizations,customers,and sellers really play an important role in the flows for social capital,and also as the entrance of market traffic,the third-party payment service providers become the paramount platform for the sale of creative online products and services.Over the past decade,China's third party payment industry march forward in triumph as if it was riding on a high-speed train.The scale of China's third-party payment industry is expending rapidly.However,risks rise with the rapid growth China's third-party payment industry.There are a large number of third-party payment platforms in the industry,but most market share is concentrated in a few large platform.Some companies engage in illegal business to seek illicit profits,or relax the businesses qualification verification to expand their market share.All of this bring about large risks to the security of customer's capital and private information,and also lay potential risks on the security of China's financial system.The risks from the third-party payment industry enlarge recently,and financial innovation,this "double edged sword",put enormous pressure on the regulators.This paper focus on the pricing of payment platform,this crucial factor which impacts the market share and profit of payment platforms.On the basis of the "two-sided market" theory,two theoretical models are built.In the case of monopoly and competition,this paper analyzes the factors of payment platform's pricing and how these factors affect the pricing strategy.The third-party payment platform connects the buyer and sellers,so the demand is not only influenced by the platform but also affected by the interaction of two sides.Then the crossing network externality is highlighted and the proportion of high-qualified sellers is introduced into the model building to search for the causes that affect the pricing action of the third-party payment platform.Finally,according to the solution result of models and the existing problems of China's third-party payment industry,suggestions to the third-party payment service providers and to the regulators is put forward in this paper.