An Empirical Study On The Impact Of Third Party Payment On Intermediate Business Of Commercial Banks

With the arrival of the era of big data and mobile internet,Internet Finance emerges as the times require and develops rapidly in China.As a major product of Internet finance,third-party payment,with its personalized platform design and simple and convenient financial services,is quickly recognized by the public and then popularized,which undoubtedly has a huge impact on the traditional financial industry.As an important sector of traditional financial industry in China,the impact of commercial banks can not be ignored.After decades of development,third-party payment is no longer limited to providing payment channels,but expands the scope of business,and builds an integrated Internet financial service platform impayment and settlement,network credit,financial investment and other fields,which gradually overlaps with the scope of intermediary business of commercial banks.The development of mobile communication has led to the third-party mobile payment.The third-party payment based on Internet payment and dominated by mobile payment has gradually become the preferred way for people to pay and settle accounts,which has impacted the payment business of commercial banks.After the third-party payment institutions have obtained the fund agency license,the fund sales of such agency platforms have increased rapidly,shaking the generation of commercial banks.On the other hand,the huge customer reserve fund held by third-party payment institutions has become an important customer of bank custody business,which promotes the development of bank custody and other trusteeship business.China's commercial banks,supported by national credit,have been lacking in innovation.Faced with the threat of third-party payment,banks gradually realize the crisis and begin to actively transform.They use the concept and technology of Internet finance to seek strategic change in operation.The scale of third-party payment has expanded further since 2013.Under this background,how will the profitability of intermediary business of commercial banks in China be affected?How does third-party payment compete with bank intermediary business to form customer competition and then affect the profitability of intermediary business?For different types of commercial banks,is there any difference in the impact mechanism?This paper expounds the above problems by combining theory with empirical research.Firstly,it combs the relevant literature at home and abroad,and after qualitative analysis of the characteristics of third-party payment and banks,clarifies the impact mechanism of third-party payment on the three main types of intermediary business of commercial banks in China,it also analyses the internal ways of the formation of this impact.Based on the above analysis,this paper puts forward three hypotheses,and makes a guess about the intrinsic way of the third-party payment's impact on the profitability of commercial banks,intermediary business and the formation of this effect,and then conducts quantitative research by using the measurement method.Based on the semi-annual data of 11 listed banks in China from 2013 to 2017,this paper establishes a fixed-effect model.Firstly,it examines the impact of third-party payment on the profitability of intermediary business of commercial banks.On the basis of confirming the existence of the impact,this paper examines the intermediary effect of the online banking channel in the third-party payment mechanism on the profitability of the bank's intermediary business,that is,whether the intrinsic path of squeezing the profitability of the bank's intermediary business exists by competing with the less internet-based online banking channel.Through theoretical analysis and empirical test,this paper finds that third-party payment has a significant negative impact on commercial banks,intermediary business profitability,and the intermediary effect of online banking channels does exist in this impact mechanism.On the one hand,third-party payment and banks compete in the main areas of intermediary business,diverting bank customers.This competition forces banks to reduce intermediary business fees and erode the profits of intermediary business from both quantitative and price directions.On the other hand,third-party payment has many advantages in platform construction and user experience,compared with online banking channels of banks.More mature,low-cost,convenient and fast operation has successfully diverted the bank's intermediary business customers,thus realizing the squeeze on the profitability of intermediary business.This paper also finds that there are differences in the effects of this mechanism on the two main types of banks in China.Based on the above conclusions,this paper finally puts forward some suggestions for commercial banks,such as specialized operation,upgrading of electronic service platform.